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Was this a CAN SLIM trade? Fundamentally, no. However, everything that got me into this trade came from studying price and volume action in CAN SLIM stocks.
CAN SLIM basics indicate that there were all kinds of things wrong with this trade. SMR rating terrible; EPS and Sales terrible; possibly a 5th stage base; heavy selling on the breakout; no index Follow Through Day. You might say that CAN SLIM traders can't make this trade. I say that a CAN SLIM trader can make this trade and the market backed me up. .
Remember that everything is a weighting of strength and weakness. Above are the main points that indicated enough strength to overcome the points of weakness. Strong fundamentals and CAN SLIM rules added to the above characteristics will likely steer you into the stocks that will have the larger and more sustained moves. In my view, after 10 weeks of correction in the index, the technicals were strong enough here to indicate some worthwhile move higher, so I had to follow the Pocket Pivot volume that came in on 6/4 and 6/5.
The confidence to enter this trade definitely came from hundreds of hours playing Chart Arcade and applying the power of Dr. Kacher's Pocket Pivot within the FIRST TWO LEGS of a CAN SLIM base break out.
You too can build up the confidence to make this trade by spending hours and hours in Chart Arcade and try buying every Pocket Pivot that occurs above a rising 50 day moving average (but does not start above the 10 day moving average).
Combine that with the power of the HTMMIS CAN SLIM rules; Chart Arcade: Ten Rules that Work and selling into: 1. second leg new highs on low volume or 2. second leg heaviest volume selling or 3. second leg heavy volume churning and you will still take some losses and the gains will be substantial.
That's how I got this one.
Abe: very nice, gutsy but very nice. Go to show about doing ones homework and paying attention. Once again very nice. Now the real work comes in what to do with it in this down trending market. Good luck.
Well I sold it on Friday afternoon given it was the largest point spread since the breakout and there was no follow through day on the index. Cooped the chickens.
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