Re: [CANSLIM] FTI Consulting FCN

From: "Tom Worley" <stkguru@bellsouth.net>
Subject: Re: [CANSLIM] FTI Consulting FCN
Date: Fri, 26 Jul 2002 07:00:33 -0400

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I would certainly agree that the 9X ADV volume of yesterday had to include
massive short covering. The 9.6 days short, however, is as of 7/15/02, less
than two weeks ago, and represented about 1.8 million shares or 10% of the
float. You don't get a 30% spike in one day on heavy volume without a lot of
reasons, and short covering certainly contributed. But a short trader also
learns, if successful, that some stocks shouldn't be shorted. This one has
risen nicely despite active shorting in a lousy market. Whether the short
traders that covered this week will now rush back in to try again remains to
be seen, but shorts have not controlled this stock so far, I see no reason
right now for that to change.

- ----- Original Message -----
From: <Spencer48@aol.com>
To: <canslim@lists.xmission.com>
Sent: Friday, July 26, 2002 12:33 AM
Subject: Re: [CANSLIM] FTI Consulting FCN


Tom:

     The number of shorts is derived monthly (even though the volume may
change daily)-so the +23% short interest is not really relevant, in my
opinion, due to the fact that you are comparing the short sales 2 months ago
with last month (ie. it was growing, but is it still?).  And my observation
concerned yesterday and today.

     Thus, although I can't be sure, it looks to me like the chart shows
that
FCN surged due to the shorts covering their postions.  To me it doesn't make
any difference whether they are profiting or "biting the bullet and taking
their loss".  My point is that the stock is not showing strength:  The only
reason it is going higher is that shorts are covering their postion.  Its
rate of change is not keeping up with its price rise-as seen in the turning
over of the 50 DMA, and the fact that the stock itself (excepting today) has
not done to much since early May.

     I conclude that there was short covering because the market is
extremely
OverSold; some arrests were made yesterday in the SEC's Executive Derby (and
that added impetus to the short covering); volume was very high today (I
concede this could be due to the strength of FCN-but in this market I doubt
it.  Although to make your point, the RS-line has been in very strong
divergence recently).  And lastly, because there are so many funds in this
stock-and if funds were covering their shorts, then volume would naturally
be
very high (as it was today).

jans

In a message dated 7/25/2002 11:27:15 PM Eastern Daylight Time,
stkguru@bellsouth.net writes:

<< maybe I am so tired I am completely brain dead, but don't understand the
 comment on the short position. The stock has been up steadily for a long
 time, and the short position is now at 9.6 days, up 23% from the last
 report, so the total shares short is still growing. That means the shorters
 are losing their shirt.....   I do agree that a 40% funds ownership in this
market is scary

 ----- Original Message -----
 From: <Spencer48@aol.com>
 To: <canslim@lists.xmission.com>
 Sent: Thursday, July 25, 2002 5:52 PM
 Subject: Re: [CANSLIM] FTI Consulting FCN

      One more thing:  DGO shows that funds own 40% of the float.  That
would
 be too high for me in a bull (I think)-and in a bear it is definitely a
 warning signal.  Moreover the short interest ratio is 9.6, which means that
 if profits are taken, the stock will plummet (short covering + 40% funds in
 the float = NO-NO)

 jans




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