Meeting Summary 12.10.09
Saturday, December 12, 2009 9:34 AM
Thanks to all who attended our CAN SLIM MeetUp on Thursday night. Below you will find a summary of our discussion. (Which has also been posted to the CAN SLIM Meet Up site) Your feedback and suggestions are always welcome.
CANSLIM MEET UP SUMMARY
DECEMBER 10, 2009
There were about 10 folks in attendance at the CAN SLIM review between 6:30 and 7:00. We reviewed the acronym and how it is used to guide our stock selection. Don?t forget to check out the files that have been uploaded to our meet-up site. (Terms are defined: Follow Through Day, Distribution Day, Three Weeks Tight, Stalling, etc.) [CANSLIM Meet Up 11.12 Agenda]
Others joined us at 7:00 PM rounding out the attendance to 30. During the first thirty minutes we discussed the current market conditions. It was noted that the last FTD (follow-through-day) was November 9th (nearly 21 S&P points, and 200+ DOW points were added.) The IBD-Big Picture column listed only 8 trading days beyond the FTD as ?Market in Confirmed Uptrend.? We?ve been ?under pressure? for the past 15 trading days. The Distribution-Day count stands at:
DOW = 4
S&P = 5
NYSE = 5
COMPQ = 5
Remember the ?M? in CAN SLIM! ?A handful of distribution days in a brief time can kill an uptrend.? (Paul Whitefield, IBD, 10.14.09 issue ?Distribution Count is Quick Take on Risk.?) In addition, we conducted chart reviews on all the major indexes and discussed tracking the Put/Call Ratio on the CBOE to monitor market sentiment. (which stood at 0.96 at the close on 12.10.09)
In addition to traditional CAN SLIM technical tools, we employed Bollinger Bands (developed by John Bollinger. ?Using 2 standard deviations ensures that 95% of the price data will fall between the two trading bands.?), Stochastics (a momentum oscillator based on the observation that as prices increase, closing prices tend to be closer to the upper end of the price range. While in downtrends, the closing price tends to be near the lower end of the range.), and Relative Strength Index (developed by J. Welles Wilder, Jr., where movements above 70 are considered ?overbought? and movements below 30 considered ?oversold.?) Viewing each major index with Bollinger Bands we observed that they are ?pinching? more tightly than anytime over the past 2 years. This is an indication that energy is building toward a BIG move in the near future. If we only knew which direction it will take!
Attendees generated a great list of stocks to discuss. Some that we reviewed include:
V, MELI, GFA, GLD, BIDU, LFT, MED, STEC, TNDM, POT, IBM
Four stock candidates that flashed recent Sell Signals were reviewed: FUQI, ININ, GMCR, AAPL. The analysis and chart screen shots have been posted to the meet up site for further review. Remember that the sell signals break down into two camps. There are those who prefer to sell-into-strength (offensive selling) and those who prefer to sell-into-weakness (defensive selling.) The first step is to identify your personal style and trade accordingly. You are encouraged to TAKE THE CHALLENGE! Spend some time with the sell signals and a few of your favorite charts. See if you can identify any sell signals. This type of practice prepares you to be better able to locate them when they appear on the charts of your current positions.
We concluded our meeting with a raffle of the newly released How to Make Money in Stocks, by William J. O?Neil.
The date for our January meeting has been set for January 14, 2010 at the GSU Brookhaven location, room 203. Our meeting will begin at 7:00 PM, with a CAN SLIM review at 6:30 for those interested.