Frequently Asked Questions
I don't understand why you would look for a stock like DRYS. While it is a liquid stock, what prompted you to look in the sub $15 range especially if price reflects quality merchandise.
You must remember first of all that CAN SLIM is what O'Neil sells to the retail public. The systems we learned were based on the use of historical precedence and understanding where institutional money needs to be in any market cycle. It's why we bought internet stocks in 1998-1999 when they had no earnings, or Lockheed Martin in 2001 when it had a 63 Relative Strength. In our view, with materials stocks moving to the forefront, we think this may create a cousin play in shippers such as DRYS. Generally we only need to see 1-2 big turnaround quarters in the stock, which is what we are looking for in DRYS next earnings announcement. There are very, very rare cases where once major leading stocks went to single digits and then emerged to much higher highs, such as Chrysler in 1991-1992.
This idea doesn't have to work, but we think that with an easy stop-out reference at the 50-day moving average around 4.40, it is a good risk-reward for those who like to play such situations. Our goal is to use our understanding of a much broader array of O'Neil-style methods that we have learned and also created on our own to reach a broad number of investors and traders who may not otherwise me familiar with the O'Neil "ethos" of investing.