Mike
05-01-2013, 05:16 PM
On Monday the buy switch turned on with a fairly rare occurrence of closing above a prior high without a Follow-Through Day. I was driving all day Monday so missed the action. Today's reversal action turned the buy switch back off because we closed below the level that turned it on. We also got an S11 Downside Reversal sell signal. We are back to looking for a Follow-Through Day.
I note that Pascal has mentioned the thrust monitoring section and that there is a CANSLIM list of long and short candidates (Mike's List). I will be updating these watchlists at least once per week, usually over the weekend. When conditions change during the week I may do some unscheduled updates. The current lists are a bit stale as for example on the long side many of the stocks have broken out and moved up beyond safe buying levels.
CANSLIM investing searches for stocks with fundamental characteristics that have historically led to some very large gains, think CISCO, AAPL, MSFT which were all very big stocks in their day. It is these underlying characteristics that I look for and try to populate my watchlists. I also look for stocks that are setting up in a constructive basing pattern such as a double bottom base or cup with handle or flat base. I analyze these bases for sound price and volume action. An example of poor action is too many down days (weeks) on above average volume indicating institutional distribution.
Essentially on the long side I look for the following characteristics (when I can get them):
Liquidity (price times average volume) greater than $20M/day, greater than $40M/day is ideal
Minimum price $15 (NYSE) $20 (NASDQ). Consider the market, towards the end of a cycle where stock prices have been bid up. Lower cost stocks (even $50 stocks) should be suspect at the end of the cycle.
Demand/Supply (50dma volume percent of float) 1% or greater, 3% or greater is ideal.
Prefer higher quality CANSLIM fundamentals:
Triple-digit EPS gains
3 quarters of EPS acceleration
3 Quarters of Sales acceleration
3 Quarters of increased Intuitional Sponsorship
Pre-Tax Margin + ROE > 50%
I note that Pascal has mentioned the thrust monitoring section and that there is a CANSLIM list of long and short candidates (Mike's List). I will be updating these watchlists at least once per week, usually over the weekend. When conditions change during the week I may do some unscheduled updates. The current lists are a bit stale as for example on the long side many of the stocks have broken out and moved up beyond safe buying levels.
CANSLIM investing searches for stocks with fundamental characteristics that have historically led to some very large gains, think CISCO, AAPL, MSFT which were all very big stocks in their day. It is these underlying characteristics that I look for and try to populate my watchlists. I also look for stocks that are setting up in a constructive basing pattern such as a double bottom base or cup with handle or flat base. I analyze these bases for sound price and volume action. An example of poor action is too many down days (weeks) on above average volume indicating institutional distribution.
Essentially on the long side I look for the following characteristics (when I can get them):
Liquidity (price times average volume) greater than $20M/day, greater than $40M/day is ideal
Minimum price $15 (NYSE) $20 (NASDQ). Consider the market, towards the end of a cycle where stock prices have been bid up. Lower cost stocks (even $50 stocks) should be suspect at the end of the cycle.
Demand/Supply (50dma volume percent of float) 1% or greater, 3% or greater is ideal.
Prefer higher quality CANSLIM fundamentals:
Triple-digit EPS gains
3 quarters of EPS acceleration
3 Quarters of Sales acceleration
3 Quarters of increased Intuitional Sponsorship
Pre-Tax Margin + ROE > 50%