2nd CANSLIM trade

     I purchased a 2nd CANSLIM stock last week. I picked up GMCR within 5% of its buy point from its base on base pattern. It had an 88.75 buy point. It had above average volume the day it broke out but shortly afterward fell back below its buy point. Its stock checkup looked good but had a few points on there that were not perfect. I am going to limit my CANSLIM holdings to just two at a time since I am trading with just a small amount of money to start out.

"M" in CANSLIM and 1st CANSLIM trade

     The "M" stands for the market direction. Investors Business Daily's "Big Picture" section announces the call each night. Yesterday's paper announced a change to a confirmed uptrend which means that it is ok to purchase stocks that are at a proper buy point. When you run a stock checkup on www.investors.com it indicates with a green dot if the market direction is right for making new purchases. If the market direction has a red dot which indicates the market is in a correction you shouldn't make new purchases.
     I purchased my first CANSLIM stock today. I purchased PCLN within 5% of its $235.90 buy point. It had volume 70% higher than average.  This stock was highly rated by IBD.  When I ran a stock checkup on PCLN it passed every point on the checkup. I plan to update how my CANSLIM trades work out on a monthly basis.

CANSLIM screen up 2763% in 12 years

     According to the American Association of Individual Investors (AAII.com) their CANSLIM screen has made over 2763% in the last 12 years. It was the top performing screen of the many they have. In the same period the S&P 500 increased 14.9%. If a computer screen can do that good, I would expect a CANSLIM pro to do even better. It should be worth the effort to do the home work to properly read charts and follow the CANSLIM rules. I hope to make my first CANSLIM trade after the market goes to a confirmed uptrend according to Investors Business Daily.

The "I" in CANSLIM

     The "I" in CANSLIM stands for Institutional sponsorship. You want to pick stocks that have an increasing amount of Institutions - such as mutual funds - buying the stock. You should pick stocks that have at least three Institutional purchasers. The more the better. You can run a stock checkup on ibd's site to find the latest percentage change in funds owning a stock, and consecutive quarters of increasing fund ownership. The stock checkup will give you either pass or fail grade for each. If a stock has no professional sponsorship, stock price increases will more than likely be small.

Apple base

     One of my favorite stocks that I hold is Apple.  I purchased this stock well over a year ago. It wasn't a canslim trade but has been very successful. According to Wednesday's IBD it is in a base. It is in a 8 week flat base because it has corrected less than 15%. It has a buy point of 208.10 which is ten cents higher than the high price of the base.  If I had money ready to invest at this time and didn't already have a position this would be an investment that I would be interested in. Apple has good earnings and is rated highly by IBD. I got this chart off of freestockcharts.com

Using Telechart

     Having tried IBD's Daily Graphs program during its recent free trial offer, I found a much less expensive option to see stock charts. I recently subscribed to the telechart charting program after trying their free website - http://www.freestockcharts.com/.  I'm finding it easier to pick out bases on the telechart charting program. I like the dark background of the graphs and easily adjustable time lines on the horizontal bottom of the charts.
     The program allows you to set alerts when the stock price crosses trend lines or moving average lines. You could also set up an alert when the stocks price reaches your buy point. I have the website set to email me alerts when these condition are met. I added the ibd 100 list of stocks to a watchlist on the telechart website and easily and fairly quickly went through each stock and set reminders on the stocks that looked to be in bases. The website emails you your reminders on the charts you want to see again. You pick whether you want daily, weekly, or monthly reminders.
     I have only scratched the surface of all there is to do in this program. There is some fundamental data on the website like you would find on daily graphs online. I think the fundamental data may not be as accurate as with the daily graphs program. But with the current sale they are offering two years gold suite service for less than $560. I'm guessing two years of the daily graphs would be $2000.

Interesting Meetup topic, November 2009

     I wanted to do a quick post on a topic that was discussed on the Naperville Meetup Webinar I viewed recently.  According to the speaker, investors who blindly follow the advice in IBD's Big Picture column aren't doing well at all this year. If someone buys when it is announced that the market is in a confirmed uptrend and sells when it is announced that the market is in correction, they miss out on much of the gains the market is giving investors this year. I guess the lesson is don't sell your stocks too fast based on the Big Picture announcement.