Re: [CANSLIM] MFA

From: Spencer48@aol.com
Subject: Re: [CANSLIM] MFA
Date: Mon, 31 Dec 2001 13:54:56 EST
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Katherine,=20

     I think this is the one you're refering to.  I'm also adding another on=
e=20
on the u/d ratio that was helpful to me:

The up/down ratio in 12/31/01 Smart Investor:=20
It's easy enough to see why there is more buying than selling as a stock=20
shoots higher. But even before a stock begins a steep climb, the buying=20
usually outweighs the selling.  Many times, companies go into consolidation=20
periods, in which their stock prices typically decline anywhere from 5% to=20
50%. During these basing phases, strong stocks may fight their way back and=20
try to reach new highs. If demand for the stock is plentiful, you'll see it=20
reflected in an up/down ratio of 1.0 or higher. Some of the past decade's=20
best stocks, such as Jabil Circuit, Anchor Gaming and Gadzooks, had up/down=20
ratios of 1.0 or better in the weeks leading up to their big moves.  Take=20
Caci International Inc. (CACI ) The computer services firm bolted out of its=
=20
base Sept. 17, surging 9 points on strong volume. The up/down ratio that wee=
k=20
was 1.9. Even in the several weeks prior, as the stock remained in its base,=
=20
the up/down ratio was 1.0 or higher [So look for up/down >1.0 as the C&H=20
bases].  The ratio - also a key element of the Stock Checkup's Attractivenes=
s=20
Rating - is a cousin of IBD's Accumulation/Distribution Rating. The Acc/Dist=
=20
Rating, however, is less prone to volume distortions, and you should use it=20
as your primary indicator. Days in which the volume is abnormally huge can=20
distort the up/down ratio. How do you tell if the balance is on the side of=20
buying? The up/down volume ratio is a good indicator. It is found in the IBD=
=20
Stock Checkup, a feature at Investor's Business Daily's Web site,=20
investors.com.=20

The Smart Investor, Monday, November 19, 2001, Using IBD's Attractiveness=20
Rating--  The Attractiveness Rating - found exclusively in the IBD Stock=20
Checkup at investors.com - is the most timely rating an investor can use to=20
gauge a stock=E2=80=99s action.  This rating [it] analyzes a stock=E2=80=99s=
 price and=20
volume, taking into account its recent trends as well as its weekly up vs.=20
down volume. In short, it looks for significant buying or selling activity=20
right here, right now.  In addition, the rating compares a stock=E2=80=99s p=
rice=20
performance with its industry group, and compares the group=E2=80=99s overal=
l=20
performance with the Standard & Poor=E2=80=99s 500 index. The rating also an=
alyzes=20
the stock=E2=80=99s tendency to appreciate or depreciate vs. the general mar=
ket -=20
what=E2=80=99s called its alpha [So, in sum, Attractiveness Rating takes int=
o acct:=20
u/d volume; price performance w/ its industry group; overall performance w/=20
the S&P; alpha (its one day fluctuation compared to a flat S&P)].  Once you=20
mix all those factors, you get a rating that is the most up-to-date=20
reflection of the stock=E2=80=99s health. The rating - expressed on a scale=20=
of 1 to=20
99, with 99 representing the most attractive stocks - moves depending on how=
=20
positive or negative the stock is acting. For example, if a stock=E2=80=99s=20=
price=20
base starts falling apart on heavy volume, it will be reflected in the=20
rating. (Not all parts of the rating are weighted equally.)  The=20
Attractiveness Rating can uncover a change in a stock=E2=80=99s pulse more q=
uickly=20
than, for example, IBD=E2=80=99s Relative Strength Price Rating. The RS Rati=
ng looks=20
at the price activity over the past 12 months. IBD SmartSelect Corporate=20
Ratings, in fact, cover longer time frames to bear out quality companies wit=
h=20
proven track records. So, while the SmartSelect Ratings give a comprehensive=
=20
view of a stock, the Attractiveness Rating focuses on the most recent=20
activity.

jans



In a message dated 12/31/2001 10:03:50 AM Eastern Standard Time,=20
kmalm@earthlink.net writes:

<< There was also a recent investor's corner on the subject. I'll see if I=20
can track down an online version.
=20
 Katherine >>

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