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Strategies & Market Trends : Poorman's - CANSLIM Potential Stocks
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To: Bananawind who wrote (21)1/11/2000 11:35:00 AM
From: Bruce A. Brotnov  Read Replies (2) of 128
 
Scott, I don't know the name of the book for candelsticks as I have a chapter on it in my telescan users manual, but I don't know the name of the book. I don't use the detailed information (nearly 30 candelstick formations as best I recall) but the executive use: green, red and yellow for possible reversal as shown on Telescan. Gives me a quick indicator as I do a zip review of about 300 charts nightly.

I seldom use physical stops, rather mental ones. Too often a stock takes a 2 or 3 point dip during the day and then closes at the open price or even higher. If I have a stock that I think is deterioating, I will sometimes sell at my lowest tolerance if it looks like it could free fall below support, but most of the time I use the mental stops. I try to list some of them in the mid-week alert list. For a stock that has strong fundamentals (e.g. HOTT) sometimes I may be too tolerant as I tend to be more like Peter Lynch in this area as he says one should be prepared for 25% pull back from buy price (barring changes in fundamentals). That also assumes that it is a decent buy price and not the peak of a vertical run.

Nice interview with the CEO of DURA today, didn't hurt it any and SFP looking much stronger today. Needs to get back above $33.

For short term holds then 7% pull back from buy price is common, but still I am cautious with actual sell stops as I prefer to base sell decisions on closing prices and overall chart picture - where the support is, etc. A drop in price with low volume is also of less concern, but a drop in price and heavy volume can be a red flag.

For CANSLIM thinking I recommend Bill O'Neil's book, How to Make Money in Stocks and for chart reading and how to watch for shorting, another older book, "Secrets for Profiting in Bull and Bear Markets" by Stan Weinstein. The 'Individual Investor' by John Murphy is another one in my library that is worth reading focuses on spotting market trends.

Bruce
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