CANSLIM, Market Direction, and Averages

[StevenXL]

Hello all,

I am reading O'Neil's book, specifically the part on Market Direction.

He often talks about how volume is important both in identifying distribution and on identifying when a market has bottomed. Specifically, volume has to be larger than average.

However, I have not seen anywhere in the book (I might have missed it), where he says what the moving average should be set at. That is, are we looking at the volume's past 30 days' average, or the past 60?

Can anyone help me with this? And, if possible, point me to the general section where O'Neil writes about this.

Thanks,

StevenXL

[steelman]

Everyone here has a different strategy. Personally, for a buy signal, I look at when a stock moves above its 30 day MA and a volume spike of at least 50%. There are several other factors that are considered. CANSLIM is great for identifying solid companies to buy, the charts will help you time your entry and exit.

Best of luck,
Steel

[StevenXL]

Thanks for the reply Steel. I think for now I will stick with a 30 day moving average.

Any other tips / links for a beginning CANSLIM investor?

[steelman]

$$$Mr. Market's$$$ model is really close to CANSLIM. I have read O'Neil's book and I did get a lot out of it. It's all about earnings.

[skiracer]

moving averages are a great indicator and tool for finding stocks either moving up or down. when their moving averages cross one another it can only mean one thing. that the stock is moving in that direction. it's one of the most useful tools that I rely on.

[IIC]

moving averages are a great indicator and tool for finding stocks either moving up or down. when their moving averages cross one another it can only mean one thing. that the stock is moving in that direction. it's one of the most useful tools that I rely on.

Then I assume you are a daily visitor to my Market Call page as the call is solely based on the positions of the 4,8 and 20emas...Thanks for your support Ski...Doug