Mad-Jon, there are stair step bases, flat bases, saucer and handle bases, Double Bottomed (W) bases, triple bottom bases, spike and roll bases, and gee, there's a lot of different kinds.
He focused on the cup and handle, and the similar but longer saucer and handle, because it is less prone to failure, and relatively easy to see on a chart.
One of the keys to success when applying the CANSLIM or any other trading methodology is to determine your 'Investor Profile'. That is, do you like to buy and hold, or swing trade? Daytrade? How long do you want to be in a stock? Years? Weeks? Months? Minutes?
Once you decide on your profile, you look at stocks from a particular point of view. If you plan to only hold on to stocks for the short term, say, less than a couple of months, well, the fundamentals of the company just don't matter! All you are interested in is Momentum!
If, on the other hand, you want to get the long term compounding and tax advantages of holding on for years or decades, well, timing doesn't matter! All you are interested in is Fundamentals!
What do you do, if you fall somewhere in the middle? You probably buy at the high and sell at the low! <grin> Seriously, this is where the O'Neil method tries get you in for the fat part of the bull move. CANSLIM does not try to pick the lows. Nor the highs. It tries to get you the middle 50% part of the move.
Best,
Adairm |
