From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #316 Reply-To: canslim Sender: owner-canslim-digest@lists.xmission.com Errors-To: owner-canslim-digest@lists.xmission.com Precedence: bulk X-No-Archive: yes canslim-digest Monday, July 6 1998 Volume 02 : Number 316 In this issue: [CANSLIM] BKS Re: [CANSLIM] Leaders leaving the station before the 06/23 follow-through day Re: [CANSLIM] Johan's Portfolio and a Canslim Puzzle Re: [CANSLIM] Leaders leaving the station before the 06/23 follow-through day Re: [CANSLIM] Leaders leaving the station before the 06/23 follow-through day [CANSLIM] 2nd opinions on picks [CANSLIM] (UPDATE) Theragenics Shares Drop After Analyst Voices Fears Of Price Drop [CANSLIM] Market Confirmation Re: [CANSLIM] 2nd opinions on picks ---------------------------------------------------------------------- Date: Sun, 5 Jul 1998 10:12:06 EDT From: Subject: [CANSLIM] BKS Barnes & Noble (BKS), may be a competetor to amzon.com seems to be breaking out. If AMZN can shoot up from about $8 to $125 in one year, BKS may become as famous as AMZN and shoot up. Looks much better comapred to AMZN and is in a similar bussiness. BKS: 68m shares outstanding, 48m float. RS: 92 EPS rank: 77 (could be better) Institutions: 30% Management:30% Surindra - - ------------------------------ Date: Sun, 05 Jul 1998 10:24:02 -0400 From: "Frank V. Wolynski" Subject: Re: [CANSLIM] Leaders leaving the station before the 06/23 follow-through day At 17:18 7/4/98 +0200, you wrote: >Does anyone else find it frustrating that a lot of the leaders already left >the station before the 06/23 follow-through day? (With the benefit of >hind-sight, the 06/16 NASDAQ reversal day was the start signal for a lot of >stocks.) > >Personally, I'm glad I now have software (QPv2) to scan the entire stock >market for new highs etc., so that during next correction, I'll be able to >watch the potential new leaders shaping up. Because that is IMO an >important part of 'watching for the market turn'. > >I'd like to know how other members approach(ed) this challenge. And I'd >also like to know who owns what they think are currently 'leaders' and >when/why they bought them. > > So I said to >myself: "Why take the risk at THIS moment in time (the 2 or 3 days after >the follow-through day)?" > >I am however actively looking for CANSLIM-type stocks and will be adding >them to my portfolio as the opportunities come along. > >Johan Van Houtven / CLICK! N.V. > I have found through observation that the "W" is usually formed from the new leadership breaking out, rebounding or otherwise advancing early. I have been content to watch them run and turn my attention to what I call secondaries. These are usually 'lower-cap' issues, but have all or at least most of the CANSLIM elements in their favor. Sometimes they are not the secondaries. The secondaries don't budge. Sometimes it's a different group of stocks completely. During the January breakout, many groups/stocks did not move right away. Commercial-Servs-Staffing didn't break out until mid February. During the correction we have recently been enjoying, Retail-Apparel/Shoes did not correct at all, but appear to be topping out only now. (And the Jury is still out on whether that is actually occurring.) With so much coverage and emphasis on "The Dow", The "S&P 500", the "Rut", it is hard to focus on what is meaningful in determining when to buy. If the early breakout of the "new leaders" causes the middle part of the "W", then the right side is either continuation or additional stocks joining the party. After a day or two, you get the 1% with expanding volume confirmation. Does the word "confirmation" imply action that has already taken place being confirmed? That a bottom has formed and a rally is in place? This is an indication that the tide has turned and now money is pouring into rather than out of the market. Based on the principles, it isn't over! It has just begun. There will be, more often than not, continuation and additional stocks that join the party. There will also be stocks/groups that have performed admirably during the correction. During Oct-Jan, if you had waited for the confirmation in January you would have missed some great opportunities in Banking & Airlines. Had you sat on the sidelines waiting for the 'confirmation' signal in June then the April-May runs in Rtl/Apparel/Shoe, Internet, Comp/Servs would have been missed. There are always pockets of performance in the markets. Finding them isn't easy when distractions and opinions are running in every direction. If it was, then we would all buy on the only day that was prudent and given 'the signal' and then we'd all sell on the exact day it was over with! 'Ronco' could put together a 'Pocket Stock Fisherman' and sell it for $19.95 in an exclusive 'TV Only' offer. The signal isn't followed by all. There are earlier arrivals and late comers. I'm certain you've pressed a Yellow lighted intersection before! And you don't blindly go when the light turns green. You look, cast a wary eye! Even though they call it the 'Stock Market', remember it is a Market of Stocks! There are groups/sectors in Bear markets right now. There are others in raging Bull Markets. Even more in between. Always is, always was, always will be. Best Regards and good hunting! Frank Wolynski - - ------------------------------ Date: Sun, 5 Jul 1998 07:27:45 -0700 (PDT) From: dbphoenix Subject: Re: [CANSLIM] Johan's Portfolio and a Canslim Puzzle <> It's common for people who approach IBD after having read HTMMIS to do so under the impression that O'N put IBD together for the use of CSers alone, but this is nowhere near the case. In fact, I suspect that many people who use IBD have never even heard of CS, which is probably why O'N is beginning a series of editorials on the subject next week. As I've said before, not every stock that goes up is going to be a CS stock and not every CS stock is going to go up. The stocks which are highlighted in IBD fit the criteria that IBD says they do, but those criteria are only some of what's necessary to define a CS stock. Therefore, some of them are going to be CS stocks and some aren't. To determine which are which, you have to go further than the sketchy details provided by the Weekend Review (or whatever). - --Db _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ Date: Sun, 05 Jul 1998 14:53:51 +0200 From: Johan Van Houtven Subject: Re: [CANSLIM] Leaders leaving the station before the 06/23 follow-through day DB, So, the strongest leaders, per definition will have ltaken of before the follow-through day or on the follow-throughday, right? They help make the follow-through day happen. If one has missed those nuclear-powered trains, which if you are a true CANSLIMer is a given (because you are supposed to wait for the follow-through day), one has to look for the next pack of trains that look ready to leave the station. My best bet then is, to look at those stocks with the right fundamentals that are forming cups? I'm having difficulty understanding this without some examples of specific stocks to look at. BTW, if I remember correctly, you bought HCFP before the follow-through day. What specifically induced you to buy it before we had had a follow-through day? I would guess: 1) The strong earnings "C" and "A" + other CANSLI elements. 2) 'M': One could have guessed that 'M' was likely close to a bottom and that the strenght of the stock in this particular case was way more important than having had no follow-through day yet. At 12:10 PM 04-07-98 -0700, you wrote: ><already left >the station before the 06/23 follow-through day? (With the benefit of >hind-sight, the 06/16 NASDAQ reversal day was the start signal for a >lot of >stocks.) > >O'Neil says you should own the leaders. But how could you own them >when you >are supposed to wait for the follow-through day? And by the time the >follow-through day was there, the leaders where already too extended >to be >considered buyable.>> > >As I said a few days ago, it's a matter of focus. Which means, in >part, letting some of the trains go. When you're coming out of a >correction, you can assume that many of these stocks are going to be >forming cups. A few will be in bases and will launch from there >before the follow-through day (it's a given that some stocks have to >go up in order for the market to rise and provide the rally and >follow-through days in the first place). You can take your chances >with them or you can wish them well. But when you're looking at >stocks in cups, there are multiple opportunities to buy them. The >third pattern--the double-bottom--gives you some notice as well if the >stock hasn't yet reached the midpoint of the W. > >But if the stock--leader or not--is in a wide and loose pattern, or no >discernible pattern at all, you don't buy it, high RS or no high RS. >That's where focus comes in. You look instead for those stocks with >constructive patterns that are less likely to do you wrong. > >--Db Johan Van Houtven / CLICK! N.V. - - ------------------------------ Date: Sun, 5 Jul 1998 09:56:29 -0700 (PDT) From: dbphoenix Subject: Re: [CANSLIM] Leaders leaving the station before the 06/23 follow-through day <> Something has to go up or there can be no rally day, much less a follow-through day. Whether the first stocks to rise are the "strongest leaders" or not is another question entirely. We assume they are, and they probably are, but I don't know if anyone has actually done a controlled study of it. <> Or are still in bases or in Ws, keeping in mind the importance of the group chart and group strength. <> Partly boredom, which I hate to admit because that's a terrible reason to get back in. But since we'd tested 1740 three times, I thought that was going to be it, so I decided to take the chance, planning from the beginning to get out if it all turned against me. Two weeks later, of course, we sank below 1740 big time, but HCFP was relatively unaffected so selling was never an issue. So I broke the rules in order to buy it, as people will do. However, if it had gone badly it would have been my fault, not CANSLIM's. Should people break the rules? No. Will they? Of course. But it's important to know what the rules are and that you're breaking them consciously so that if the trade doesn't work out you know what to do about it (like renewing one's vows not to break the rules again). - --Db _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ Date: Sun, 5 Jul 1998 21:58:30 -0500 From: "Amy Porter and Rich Bejtlich" Subject: [CANSLIM] 2nd opinions on picks Before I make an appointment with Dr. Datek, I was wondering if anyone might have second opinions on the following: Qiagen NV (QGENF) -- basing Capital One Financial (COF) -- breaking out? Starbucks (SBUX) -- breaking out? I am 2 days behind in my IBDs, but my research of the 30 Jun and 1 July papers turned up these three as the best CS candidates. Granted, COF and SBUX have more than 25M shares. Thanks, Richard - - ------------------------------ Date: Sun, 5 Jul 1998 21:07:59 -0700 (PDT) From: Tim Fisher Subject: [CANSLIM] (UPDATE) Theragenics Shares Drop After Analyst Voices Fears Of Price Drop Found out why THRX was acting up. Seems like a classis sheep overreaction to me. Anyway that still doesn't make me want to buy it. For you new to my picks, that's a buy signal for the rest of you. Practically guaranted to doulbe your money ;) >Subject: (UPDATE) Theragenics Shares Drop After Analyst Voices Fears Of Price Drop > >SchwabAlerts Intraday News Update > >Thursday July 2, 1998 (generated at 04:31 PM EST) > >____________________________________________________ > >Theragenics Corp (NASDAQ:THRX) > >By Melanie Trottman, Staff Reporter > NEW YORK -(Dow Jones)- Theragenics Corp. shares fell 36% Thursday, >sparked by a Dain Rauscher note that cut ratings on several companies >involved in a technique for treating prostate cancer called >brachytherapy. > Brachytherapy is a process where a tiny radioactive implant is used >to destroy tumors. The Dain Rauscher analyst hinted that too much >radioactive material may come on the market, forcing prices lower. > "The market's reacting to Dain Rauscher's comments," said Nutmeg >Securities Ltd. analyst Kenneth Pounds. He added that the stock's sharp >descent is "a screaming buy opportunity." > Patrice Halbert, the Dain Rauscher analyst who issued the report on >the sector, wasn't immediately available for comment. But according to >the note, she lowered her rating on Theragenics to "neutral" from "buy" >and reduced fiscal 1999 earnings estimates to 67 cents from 77 cents. Tim Fisher, 1995 President, Pacific Fishery Biologists Ore-ROCK-On Rockhounding Web Site PFB Information mailto:tim@OreRockOn.com WWW http://OreRockOn.com - - ------------------------------ Date: Mon, 6 Jul 1998 08:03:32 -0400 From: "Knowles, Richard N." Subject: [CANSLIM] Market Confirmation Group, I have been looking at the NASDAQ and NYSE charts and have noticed that there is a lot of sideways motion, but no clear confirmation of the most recent rally (i.e. current highs not meeting previous highs). Whats the words of wisdom when the market reacts this way, is this a bearish indication? Esp. with all the uncertainty in Asia, I am wondering if its safe to risk any investments until such a time? Rich - - ------------------------------ Date: Mon, 6 Jul 1998 07:53:49 -0700 (PDT) From: dbphoenix Subject: Re: [CANSLIM] 2nd opinions on picks <> True. <> This one "broke out" of its bases when it exceeded 105. At this point, there's nothing for it to break out of. <> Not sure what you're looking at. It broke out of its base three weeks ago when it exceeded 50. That was one breakout. That failed and the stock retested the base (which by that time coincided with the 50d). This retest was successful and it broke out again the following day. Its first attempt at a new high last week failed, but the second attempt succeeded. So it depends on how you define "breakout". What are you looking for the stock to break out of? - --Db _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ End of canslim-digest V2 #316 ***************************** To unsubscribe to canslim-digest, send an email to "majordomo@xmission.com" with "unsubscribe canslim-digest" in the body of the message. For information on digests or retrieving files and old messages send "help" to the same address. Do not use quotes in your message.