CIS: IPO Breakout | stockbee


CIS: IPO Breakout

CIS is breaking out after a sideways move for a month or so. Higher volume would have been preferable.


Sriram said...

What do you think about the VDSI breakout?

Pradeep Bonde said...

I don't see a game changing earnings or story in it. Does not fit my earnings episodic pivots profile. So I let it pass. I only buy things which I can easily understand. In this case I see no reason for it to continue moving higher. But I might be wrong. Strange things happen in market. So might work.

Ty Coon said...

Hey Stockbee,
I've been following along with you and Patient Fisherman and I am having trouble with something that I thought you might be able to help with. I have been trying to follow CANSLIM as O'Neil lays out in his book and have been screening for stocks that meet the following criteria each day out of the IBD Stocks on the Move screen.

Composite, EPS, RS over 80
SMR, Acc/Dis, Group Rs > A, B
Volume > 100
Earning and sales over 25%
Float <100

In checking out the percolator scan, this brings back stocks today that have great price percentage increases on huge volumes.

However, most of the stocks don't meet the criteria above, I know it's a tight criteria. I'm doing that while I am learning to reduce the number of stocks that I have to review each day.

What I am having a tough time reconciling is should I invest in those stocks that have weak IBD ratings or is institutional support all that I am concerned about.

I'm guessing that most of the stocks that meet my strong criteria might at this point be over extended and that maybe I'm late to the party.

If that's the case and I want to use the IBD system as advertised how far should I relax my thresholds.

Thanks for the help!

Pradeep Bonde said...

Patientfisherman and me do not follow the IBD method. Our method is based on momentum.

Everyone who reads William O'Neil book has a different understanding of IBD method. What you have done is you interpreted his writing in your own way.

The IBD method has lot of stress on anticipating breakout zones. So if you want to trade it you need to start with large universe of stocks with probably 70 eps and 70 Relative strength rating and then reduce them to few anticipation breakouts. On those then look at breakout zones. Only on those stocks look at earnings , fund holding and so on.

IBD method is pretty complicated method and there are wheels within wheels within wheels. There are hundreds of nuances involved in trading it.

I have studied IBD method in microscopic details over last 10 years and traded it in the past. It is pretty time consuming method. Having learned from it now I trade pretty simple methods and they are not necessarily based on IBD philosophy.