One New Very Speculative CANSLIM Long Position For Wednesday’s Post-Holiday Market Session

December 24, 2007

There was only one new long that showed up on the scans that is a buy and to be honest I think it is simply too risky to be a decent size position. I am keeping this very small and am going long just in case it explodes to the upside. I want to be able to say I was long on the rally, if we get one from this stock. Obviously, my biggest beef is with the stock being so far away from the 50 dma. If the stock pullsback, it has a natural 18% retracement in it. So this makes it too dangerous for that simple reason. Problem number two is the extremely low average daily volume of only 10,080 a day. Most of you know 100,000 is my minimum a stock must average to be solid enough to make a large position. So this one does not qualify. And my last beef is with the stocks price/volume action. This chart is very green and beautiful but two trading sessions ago it bounced right off the 50 dma, closing near the HOD. It would have been a long but volume was below the 50 dma and BOP fell (but it did remain green) making it seem silly to buy a stock that looked so sloppy on an arithmetic long-term scale. However, now we have our volume, strong close at a new high, and rising green BOP, making it worth a poke. Newbies I suggest you stay completely away and this rule should apply to all stocks under 100k average daily volume.

new very speculative CANSLIM long position: KEQU

KEQU is breaking out of a short cup base to new all-time high, on strong volume. Cut your first loss with a close below the 18.17 level and your final loss with a close below the 50 day moving average, if the stock does not move higher immediately.

kequ1224__Large_.PNG

Last 5 posts in Free Archives Longs

Posted by Joshua Hayes | Filed Under Free Archives Longs 

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