5-1-2013 Close Comments

[Mike]

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:
  1. Triple-digit EPS gains
  2. 3 quarters of EPS acceleration
  3. 3 Quarters of Sales acceleration
  4. 3 Quarters of increased Intuitional Sponsorship
  5. Pre-Tax Margin + ROE > 50%

[barbados11]

Hi Mike,

Thanks for the post but i can't find: CANSLIM list of long and short candidates (Mike's List) on the CANSLIM forum. I see all your comments where you mention some stocks but not a list per se. Do you have a link or does it go under something else?

Thanks,

B

[Billy]

Hi Mike,

Thanks for the post but i can't find: CANSLIM list of long and short candidates (Mike's List) on the CANSLIM forum. I see all your comments where you mention some stocks but not a list per se. Do you have a link or does it go under something else?

Thanks,

B

Dear B,

Mike's list is part of the Trading Models subscription package for RT thrust monitoring.
Here are the stocks currently tracked, but please take note of Mike's comments about them.




Potential long trades
CELG
116.62
REGN
237.26
PRLB
50.66
HTZ
23.39
LNKD
194.80
TLLP
61.12
GNC
44.67
RWT
22.43
AMBA
13.50
FRAN
26.84
AWAY
29.38
LL
79.67
VRX
73.67
MDCO
32.76
USAC
21.57
XONE
37.12

Potential short trades
LULU
75.44
PCLN
695.20
ALGN
32.65
REGN
237.26
ULTA
86.55
VMW
70.47
SSYS
79.71
BIDU
84.90
EW
62.53
WFM
89.02
MNST
55.91
CAB
63.34
DDD
37.71

Billy

[barbados11]

Thanks Billy. From Mike's post I thought they were on the Canslim forum.

Best.