dbphoenix
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Going thru my CANSLIM screen this morning, I was struck by the textbook quality of so many of these charts and decided to post an example just for grins.
This is not a buy now, of course. The novice says something along the lines of "okay, I'm ready now, gimmee summa dose CANSLIM stocks", and if he happens to find one and buys it, he expects it to go up the next day. Unfortunately, it doesn't work that way. The guidelines in the book are quite clear, at least in the earlier editions, preferably the first or second. Unfortunately, following those guidelines involves waiting, and few novices care to wait.
In any case, the following represents a good example of what to look for.
First, note the very long base (the blocked area). Then the surge in volume, two months after the low point of the correction (see the XLY and Nasdaq charts). The three arrows indicate buypoints if one so chooses to buy there. Also note what's happening in the blowup of the blocked area, that the stock is basing for five months +/- while both the sector and the pertinent market are dropping (do you really need an RS number?). And note where it holds in August, dead against the top of the base (Darvas would love it). Also note the absolute flatline from May through July.
Problem is, novices don't want to buy at the bottom of bear markets. Nor do they want to buy at the bottom of corrections. They'd rather wait until the stock doubles or triples or quadruples. Then they start looking for cups and handles. And wonder why their "breakouts" fail.
If one wants CANSLIM to perform, then he must follow at least its guidelines, if not its rules. This will generally mean taking action while others are in a twist, i.e., at bottoms (and if you're wondering about 52-week highs, 15 was a 52-week high).
Edit: for the sake of completeness, I've added a chart of the group to which this stock belongs (Casinos).
This is not a buy now, of course. The novice says something along the lines of "okay, I'm ready now, gimmee summa dose CANSLIM stocks", and if he happens to find one and buys it, he expects it to go up the next day. Unfortunately, it doesn't work that way. The guidelines in the book are quite clear, at least in the earlier editions, preferably the first or second. Unfortunately, following those guidelines involves waiting, and few novices care to wait.
In any case, the following represents a good example of what to look for.
First, note the very long base (the blocked area). Then the surge in volume, two months after the low point of the correction (see the XLY and Nasdaq charts). The three arrows indicate buypoints if one so chooses to buy there. Also note what's happening in the blowup of the blocked area, that the stock is basing for five months +/- while both the sector and the pertinent market are dropping (do you really need an RS number?). And note where it holds in August, dead against the top of the base (Darvas would love it). Also note the absolute flatline from May through July.
Problem is, novices don't want to buy at the bottom of bear markets. Nor do they want to buy at the bottom of corrections. They'd rather wait until the stock doubles or triples or quadruples. Then they start looking for cups and handles. And wonder why their "breakouts" fail.
If one wants CANSLIM to perform, then he must follow at least its guidelines, if not its rules. This will generally mean taking action while others are in a twist, i.e., at bottoms (and if you're wondering about 52-week highs, 15 was a 52-week high).
Edit: for the sake of completeness, I've added a chart of the group to which this stock belongs (Casinos).
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