Technical Analysis Basics Can Help You Avoid Larger Losses

Technical Analysis Basics Can Help You Avoid Larger Losses Kenneth J. Gruneisen, Founder and Contributing Writer, www.CANSLIM.net CANSLIM.net Another concept that applies in all market conditions to study. Technical Analysis Basics Can Help You Avoid Larger Losses Example #1 For a perfect example of how an understanding of technical analysis can help you avoid suffering larger losses, take a look at the attached charts of Ford Motor Company (F-NYSE). Technical analysts know that when a stock is breaking down to new lows on heavier trading volume than normal, more often than not the situation is going to get a lot worse before it gets better (if it ever will get better). On Ford's daily chart when it recently broke to new lows under the previous lows ($14.88 on 4/8/02 and $13.90 on 2/7/02 were previous lows) ) it was clearly a bad technical failure. In its weekly chart you can see an earlier (8/17/01) breakdown that gave investors a "sell signal" in the low $20's. No need to be wondering what to do with Ford trading near $7.00 today (10/9/02). You would have already been out of Ford if you had been able to recognize the messages it was giving you simply through looking at its chart. Example #2 Follow up to November 2002 CANSLIM.net News Article HMO Tenet Health Care Provides a Great Example of What to Watch Out For At the start of this month the November 2002 issue of CANSLIM.net News included an example of "What to Look Out For" including remarks about the HMO stocks, and specifically highlighting Tenet Healthcare. In regard to HMO stocks we reiterated that "the group has shown numerous reversals and signs of topping." Fast forward to Friday, November 8th, when Tenet Healthcare (THC -46.69%) dealt the healthcare sector yet another blow. A slew of brokerages downgraded the stock on news of the departure of its CFO and COO, both of whom suddenly decided they want to spend more time with their family. THC will now have to revamp its management team in the wake of questions about its Medicare reimbursements. This is a great example of how CANSLIM.net News helps subscribers! In this case we showed more about the anatomy of a breakdown, pointed out some sell signals to recognize, and helped some folks avoid devastating losses! In order to make profits you must first be able to manage risk and know how to preserve your investment capital. Get an ongoing education and learn more about Technical Analysis by ordering a subscription to CANSLIM.net News
About Kenneth J. Gruneisen, Founder and Contributing Writer, www.CANSLIM.net : Kenneth J. Gruneisen has successfully completed the CAN SLIM^® Certification Program. Mr. Gruneisen became a Registered Representative in 1987 and his career includes experience offering personalized assistance to investors with more than a decade of experience as a Registered Principal managing a branch office. The recommendations made by CAN SLIM^® certified individuals are their own and may not be attributed to the CAN SLIM^® Certification Program, William O'Neil & Co., Investor's Business Daily or their affiliates. The CAN SLIM^® Certification indicates only that the individual has successfully completed the CAN SLIM^® Certification Program. CAN SLIM^®, William O'Neil & Co., Investor's Business Daily and any of their affiliates are in no way responsible for any loss or damage caused as a result of the services provided by these individuals. Comments contained in the body of this report are technical opinions only and are not necessarily those of Gruneisen Growth Corp. The material herein has been obtained from sources believed to be reliable and accurate, however, its accuracy and completeness cannot be guaranteed. Our firm, employees, and customers may effect transactions, including transactions contrary to any recommendation herein, or have positions in the securities mentioned herein or options with respect thereto. Any recommendation contained in this report may not be suitable for all investors and it is not to be deemed an offer or solicitation on our part with respect to the purchase or sale of any securities.
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