Go to Jeff Salisbury LWGate Home Page.From: "Mike Gibbons" <mikegibbons@proactech.com>
Subject: RE: [CANSLIM] Current Case Study - XRAY
Date: Wed, 14 Aug 2002 08:52:48 -1000
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> a V-shaped cup with no valid handle yet in my mind.
I agree. It formed two short handles (less than 5 days so not valid) starting on 8/8 and then 8/13. Today it's moved up 3.7% on
above average volume and so is out of the most recent "handle" at least momentarily - the market close will determine if it
continues to form the current handle or not.
Aloha,
Mike Gibbons
Proactive Technologies, LLC
http://www.proactech.com
-----Original Message-----
From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Katherine Malm
Sent: Wednesday, August 14, 2002 8:08 AM
To: canslim@lists.xmission.com
Subject: Re: [CANSLIM] Current Case Study - XRAY
Hi Jeffrey,
I've had your question set a side since you posted, because frankly, XRAY's pattern did not fit the mold of the "Healthy Rising
Stock" in which you can easily count bases and I was clueless as to how to answer.
Here's what I *did* know by looking at XRAY's chart:
-This is a stock on the rise, each time sporting a new, valid, base as it progresses along the uptrending path. In that sense, it
fits the model of a "healthy rising stock" as I outlined in my notes the other day on the CECO discussion.
http://WallStreet-LLC.com/canslim/HealthyRisingStock.JPG
-This is not an ascending base, but instead a series of bases one after the other
http://WallStreet-LLC.com/canslim/TypesOfBases.JPG
-The problem with your question is that the rise between each successive base is not at least 25%, which would allow you to "count
bases" in a traditional sense. That means that it's unlikely that this would be considered a first stage base. Intuitively, it
doesn't make sense that it would be, either.
Now, I was stuck, because the advance doesn't fit the mold. So how in the world to count bases? WON says that if it doesn't rise
at least 25%, you don't add to the count. But.... I'm still not sure how you would treat something like this in that context. In my
mind, if a stock is rising/basing/rising/basing/etc., *especially* in a Bear Market, then there's something going for it. So, to
answer your question specifically, I called in the big guns and asked Tim Truebenbach of TradingMarkets.com.
Here is his reply in answer to the specific question, "If the rise between bases is <25%, how do you count it?"
His answer: "If the rise is less than 25% and the stock forms a new qualifying base (7 weeks or longer) then I would not count the
previous base in the base count." [KM Note: a flat base only needs to be >=5wks]
But, interestingly, he added this additional comment: "I don't put much weight into base counts during a Bear Market, because a
stock that would normally push higher in an orderly fashion gets very choppy. At this point, just look at the most recent base of a
stock and assess it from there."
Well, there you go... a fresh point of view and something new learned as a result!
In our conversation, another very interesting point came up. That is, though I am a fiend about reading market history, my own
personal active trading experience is entirely in the '90's. That means that I have mental models of chart patterns formed
accordingly. Tim suggested that it would be a great exercise to go back and re-review chart models *prior* to the '90's in HTMMIS
and in the CANSLIM/IBD Advanced Seminar notebook (for those who have attended). A great idea and something I'll be adding to my
to-do list.
So...back to XRAY. Because XRAY hasn't formed a series of bases separated by a rise of 25%, you don't reset the base count. See my
annotations at: http://WallStreet-LLC.com/canslim/XRAY081402.jpg.
That leaves us with looking at the most current base, a V-shaped cup with no valid handle yet in my mind. (Certainly open to
interpretation, so fire away!). See it at: http://WallStreet-LLC.com/canslim/XRAY(2)081402.jpg
Katherine
PS...Thanks for your question Jeffrey.... a real gold mine of learning for me personally.
----- Original Message -----
From: Gasta, Jeffrey
To: 'canslim@lists.xmission.com'
Sent: Thursday, August 08, 2002 2:58 PM
Subject: RE: [CANSLIM] Current Case Study - XRAY
Hello, another neophyte here. If the most recent pattern for XRAY is a valid CWH, then what stage base is it? I think I see a
flat base running from about Feb. 02 until late May. This most recent pattern undercuts the previous pattern. So maybe this is a
1st stage base? Thanks, jg
-----Original Message-----
From: Mike Gibbons [mailto:mike@proactech.com]
Sent: Thursday, August 08, 2002 3:27 PM
To: canslim@lists.xmission.com
Subject: [CANSLIM] Current Case Study - XRAY
In view of the interest in current cases rather than 20-20 hindsight, and discussions to aid the learning process, I offer
XRAY as an example, which broke out today from a CwH pattern with short handle
Firstly, let me add the disclaimer that I'm a programmer who was introduced to CANSLIM as a development project, and I'm 1
year into the 3 yr learning curve, so further comment by the "experts" is welcomed to improve my own understanding.
Firstly the fundamentals which are very strong, with the exception that Institutional Ownership is already quite high. There
are differing views on what the level should be, but somewhere less than 30% would be better. Additional DD would be required to
determine why pre-tax profit margins are decreasing and if that is cause for concern. (This information is drawn from yahoo/multex
not IBD)
C Current Earnings Earnings per share growth of at least 25% in the most recent quarter Most recent quarter year on year
growth. (Published financial data).
35.00 %
Latest three quarters of sales growth should be a minimum of 25% Average year on year growth for last 3 quarters.
(Published financial data). 51.00 %
Sales growth should be accelerating. Difference in year on year growth rates over last 3 quarters. (Published financial
data). 23.00
A Strong Annual Earnings Growth Annual earnings growth for the last three years of 25% or greater 3 year compound EPS
growth rate. (Published financial data). 53.00 %
Return on equity should be at least 17% Published financial data. 21.00 %
Pretax profit margins should be increasing Profit Margin for most recent quarter minus profit margin 1 year ago.
(Published financial data). -1.00
N New Products, Services or Leadership If a company has a dynamic new product or service, or is capitalizing on new
conditions in the economy, this can have a dramatic impact on the price of a stock. Buy stocks just as they emerge from a sound
"base" pattern and make new price highs. Not Known
S Supply and Demand Watch the demand for shares by looking at the percentage change in volume for each of your stocks.
Analyze a stock's daily and weekly price and volume changes. The up/down volume ratio measures the ratio of accumulation days to
distribution days over the last 50 days. 0.90
L Leading Stocks in Leading Industry Groups Nearly 50% of a stock's price action is a result of its industry group's
performance. Focus on the top industry groups, and within those groups select stocks with the best price performance. Multex
Industry Rank ( 0 - 99 )
(26 week relative performance). 90
Multex Rank within Industry ( 0 - 99 ). Provided for informational purposes only.
(4 week relative performance)
22
The stock's Relative Price Strength Rating should be in the 80s or 90s We calculate RS daily by ranking all NYSE, AMEX
and NASDAQ stocks. Our RS algorithm is described here. It correlates well with IBD's. Value. Score pro-rated in range 60-79. 83
I Institutional Sponsorship You want at least a few of the better performing mutual funds owning the stock. They're the
ones who will drive the stock up on a sustained basis. Institutional Ownership. Value in range 5 - 30% needed to score 1. 79.00 %
No. of Institutions. Provided for informational purposes only. 568
M Market Direction You can buy the best stocks, but if the general market is weak, most likely your stocks will be weak
also. Because Market Direction is not specific to any one particular stock, we do not evaluate it on a per stock basis.
Look at the chart below. Note that the handle is only 3 days long. This is normally insufficient to have shaken out the
potential sellers and WON recommends that a handle should be at least 1-2 weeks long, otherwise a breakout is prone to failure. Also
the volume in the handle has not dried up. This is often the case in the early days of handle formation and we would like to see the
volume decrease below the ADV and the price wedge downwards as the handle progresses.
Look at the volume coming up the right side of the cup - consistently above the 50 ADV accompanied by big price positive price
movements, with only two days when the stock closed slightly down. It would have been better if the volume had been below the ADV on
those days, in which case the stock would have earned a higher CQ (Chart Quality) score.
Note the RS line. This is quite high at 83, but has advanced only slightly over the last few days despite significant price
gains in this stock. This indicates that other stocks are doing at least as well.
The 50 day up/down volume is at 0.90. Values less than 1 mean that the down volume days exceed the up volume days. However,
the trend of the line is upwards, which is a positive sign.
I'll go out on a limb and say my guess is that todays breakout will not be sustained (although its holding now - just) and it
will continue to form a handle.
I conclude that this is one to watch but not to buy right now.
Aloha,
Mike Gibbons
Proactive Technologies, LLC
http://www.proactech.com
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<DIV><SPAN class=3D930193718-14082002><FONT face=3DTahoma =
color=3D#000080 size=3D2>>=20
<FONT face=3D"Times New Roman" color=3D#000000 size=3D3>a V-shaped cup =
with no valid=20
handle yet in my mind. </FONT></FONT></SPAN></DIV>
<DIV><SPAN class=3D930193718-14082002></SPAN> </DIV>
<DIV><SPAN class=3D930193718-14082002><FONT face=3DTahoma =
color=3D#000080 size=3D2>I=20
agree. It formed two short handles (less than 5 days so not valid) =
starting on=20
8/8 and then 8/13. Today it's moved up 3.7% on above average volume =
and so=20
is out of the most recent "handle" at least momentarily - the market =
close will=20
determine if it continues to form the current handle or =
not.</FONT></SPAN></DIV>
<DIV> </DIV>
<DIV><FONT face=3DTahoma color=3D#000080 size=3D2>Aloha,</FONT></DIV>
<DIV><FONT face=3DTahoma color=3D#000080 size=3D2></FONT> </DIV>
<DIV><FONT face=3DTahoma color=3D#000080 size=3D2>Mike =
Gibbons</FONT></DIV>
<DIV><FONT face=3DTahoma color=3D#000080 size=3D2>Proactive =
Technologies,=20
LLC</FONT></DIV>
<DIV><FONT face=3DTahoma color=3D#000080=20
size=3D2>http://www.proactech.com</FONT></DIV>
<BLOCKQUOTE dir=3Dltr style=3D"MARGIN-RIGHT: 0px">
<DIV class=3DOutlookMessageHeader dir=3Dltr align=3Dleft><FONT =
face=3DTahoma=20
size=3D2>-----Original Message-----<BR><B>From:</B>=20
owner-canslim@lists.xmission.com=20
[mailto:owner-canslim@lists.xmission.com]<B>On Behalf Of </B>Katherine =
Malm<BR><B>Sent:</B> Wednesday, August 14, 2002 8:08 AM<BR><B>To:</B>=20
canslim@lists.xmission.com<BR><B>Subject:</B> Re: [CANSLIM] Current =
Case Study=20
- XRAY<BR><BR></FONT></DIV>
<DIV>Hi Jeffrey,</DIV>
<DIV> </DIV>
<DIV>I've had your question set a side since you posted, because =
frankly,=20
XRAY's pattern did not fit the mold of the "Healthy Rising Stock" in =
which you=20
can easily count bases and I was clueless as to how to answer.</DIV>
<DIV> </DIV>
<DIV>Here's what I *did* know by looking at XRAY's chart:</DIV>
<DIV>-This is a stock on the rise, each time sporting a new, valid, =
base as it=20
progresses along the uptrending path. In that sense, it fits the model =
of a=20
"healthy rising stock" as I outlined in my notes the other day on the =
CECO=20
discussion.</DIV>
<DIV><SPAN style=3D"mso-fareast-font-family: 'MS Mincho'"><SPAN=20
style=3D"mso-fareast-font-family: 'MS =
Mincho'"> &nbs=
p; =20
<A=20
=
href=3D"http://WallStreet-LLC.com/canslim/HealthyRisingStock.JPG">http://=
WallStreet-LLC.com/canslim/</SPAN>HealthyRisingStock.JPG</A></SPAN></DIV>=
<DIV>
<P class=3DMsoPlainText style=3D"MARGIN: 0in 0in 0pt"><SPAN=20
style=3D"mso-fareast-font-family: 'MS Mincho'">-This is not an =
ascending base,=20
but instead a series of bases one after the other</SPAN></P>
<P class=3DMsoPlainText style=3D"MARGIN: 0in 0in 0pt"><SPAN=20
style=3D"mso-fareast-font-family: 'MS Mincho'"><SPAN=20
style=3D"mso-fareast-font-family: 'MS =
Mincho'"> &nbs=
p; =20
<A=20
=
href=3D"http://WallStreet-LLC.com/canslim/TypesOfBases.JPG">http://WallSt=
reet-LLC.com/canslim/</SPAN>TypesOfBases.JPG</A></SPAN></P>
<P class=3DMsoPlainText style=3D"MARGIN: 0in 0in 0pt"><SPAN=20
style=3D"mso-fareast-font-family: 'MS Mincho'">-The problem with your =
question=20
is that the rise between each successive base is not at least 25%, =
which would=20
allow you to "count bases" in a traditional sense. That means that =
it's=20
unlikely that this would be considered a first stage base. =
Intuitively, it=20
doesn't make sense that it would be, either.</SPAN></P>
<P class=3DMsoPlainText style=3D"MARGIN: 0in 0in 0pt"><SPAN=20
style=3D"mso-fareast-font-family: 'MS Mincho'"></SPAN> </P>
<P class=3DMsoPlainText style=3D"MARGIN: 0in 0in 0pt"><SPAN=20
style=3D"mso-fareast-font-family: 'MS Mincho'">Now, I was stuck, =
because the=20
advance doesn't fit the mold. So how in the world to count bases? WON =
says=20
that if it doesn't rise at least 25%, you don't add to the count. =
But.... I'm=20
still not sure how you would treat something like this in that =
context. In my=20
mind, if a stock is rising/basing/rising/basing/etc., *especially* in =
a Bear=20
Market, then there's something going for it. So, to answer your =
question=20
specifically, I called in the big guns and asked Tim Truebenbach of=20
TradingMarkets.com.</SPAN></P>
<P class=3DMsoPlainText style=3D"MARGIN: 0in 0in 0pt"><SPAN=20
style=3D"mso-fareast-font-family: 'MS Mincho'"></SPAN> </P>
<P class=3DMsoPlainText style=3D"MARGIN: 0in 0in 0pt"><SPAN=20
style=3D"mso-fareast-font-family: 'MS Mincho'">Here is his reply in =
answer to=20
the specific question, "If the rise between bases is <25%, how do =
you count=20
it?"</SPAN></P>
<P class=3DMsoPlainText style=3D"MARGIN: 0in 0in 0pt"><SPAN=20
style=3D"mso-fareast-font-family: 'MS Mincho'">His answer: "If the =
rise is less=20
than 25% and the stock forms a new qualifying base (7 weeks or longer) =
then I=20
would not count the previous base in the base count." [KM Note: a flat =
base=20
only needs to be >=3D5wks]</SPAN></P>
<P class=3DMsoPlainText style=3D"MARGIN: 0in 0in 0pt"><SPAN=20
style=3D"mso-fareast-font-family: 'MS Mincho'"></SPAN> </P>
<P class=3DMsoPlainText style=3D"MARGIN: 0in 0in 0pt"><SPAN=20
style=3D"mso-fareast-font-family: 'MS Mincho'">But, interestingly, he =
added this=20
additional comment: "I don't put much weight into base counts during a =
Bear=20
Market, because a stock that would normally push higher in an orderly =
fashion=20
gets very choppy. At this point, just look at the most recent base of =
a stock=20
and assess it from there."</SPAN></P>
<P class=3DMsoPlainText style=3D"MARGIN: 0in 0in 0pt"><SPAN=20
style=3D"mso-fareast-font-family: 'MS Mincho'"></SPAN> </P>
<P class=3DMsoPlainText style=3D"MARGIN: 0in 0in 0pt"><SPAN=20
style=3D"mso-fareast-font-family: 'MS Mincho'">Well, there you go... a =
fresh=20
point of view and something new learned as a result!</SPAN></P>
<P class=3DMsoPlainText style=3D"MARGIN: 0in 0in 0pt"><SPAN=20
style=3D"mso-fareast-font-family: 'MS Mincho'"></SPAN> </P>
<P class=3DMsoPlainText style=3D"MARGIN: 0in 0in 0pt"><SPAN=20
style=3D"mso-fareast-font-family: 'MS Mincho'">In our conversation, =
another very=20
interesting point came up. That is, though I am a fiend about reading =
market=20
history, my own personal active trading experience is entirely in the =
'90's.=20
That means that I have mental models of chart patterns formed =
accordingly. Tim=20
suggested that it would be a great exercise to go back and re-review =
chart=20
models *prior* to the '90's in HTMMIS and in the CANSLIM/IBD Advanced =
Seminar=20
notebook (for those who have attended). A great idea and something =
I'll be=20
adding to my to-do list.</P></SPAN></DIV>
<DIV> </DIV>
<DIV>So...back to XRAY. Because XRAY hasn't formed a series of bases =
separated=20
by a rise of 25%, you don't reset the base count. See my annotations =
at: <A=20
=
href=3D"http://WallStreet-LLC.com/canslim/XRAY081402.jpg.">http://WallStr=
eet-LLC.com/canslim/XRAY081402.jpg.</A></DIV>
<DIV> </DIV>
<DIV>That leaves us with looking at the most current base, a V-shaped =
cup with=20
no valid handle yet in my mind. (Certainly open to interpretation, so =
fire=20
away!). See it at: <A=20
=
href=3D"http://WallStreet-LLC.com/canslim/XRAY(2)081402.jpg">http://WallS=
treet-LLC.com/canslim/XRAY(2)081402.jpg</A></DIV>
<DIV> </DIV>
<DIV>Katherine</DIV>
<DIV> </DIV>
<DIV>PS...Thanks for your question Jeffrey.... a real gold mine of =
learning=20
for me personally.</DIV>
<DIV> </DIV>
<DIV> </DIV>
<DIV>----- Original Message ----- </DIV>
<BLOCKQUOTE dir=3Dltr=20
style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; =
BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: =
black"><B>From:</B>=20
<A title=3DJeff.Gasta@marriott.com=20
href=3D"mailto:Jeff.Gasta@marriott.com">Gasta, Jeffrey</A> </DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A =
title=3Dcanslim@lists.xmission.com=20
=
href=3D"mailto:'canslim@lists.xmission.com'">'canslim@lists.xmission.com'=
</A>=20
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Thursday, August 08, =
2002 2:58=20
PM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> RE: [CANSLIM] =
Current Case=20
Study - XRAY</DIV>
<DIV><BR></DIV>
<DIV><SPAN class=3D317335419-08082002><FONT face=3DArial =
color=3D#0000ff=20
size=3D2>Hello, another neophyte here. If the most recent =
pattern for=20
XRAY is a valid CWH, then what stage base is it? I think I see =
a flat=20
base running from about Feb. 02 until late May. This most =
recent=20
pattern undercuts the previous pattern. So maybe this is a 1st =
stage=20
base? Thanks, jg</FONT></SPAN></DIV>
<BLOCKQUOTE dir=3Dltr style=3D"MARGIN-RIGHT: 0px">
<DIV class=3DOutlookMessageHeader dir=3Dltr align=3Dleft><FONT =
face=3DTahoma=20
size=3D2>-----Original Message-----<BR><B>From:</B> Mike Gibbons=20
[mailto:mike@proactech.com]<BR><B>Sent:</B> Thursday, August 08, =
2002 3:27=20
PM<BR><B>To:</B> canslim@lists.xmission.com<BR><B>Subject:</B> =
[CANSLIM]=20
Current Case Study - XRAY<BR><BR></FONT></DIV>
<DIV><FONT face=3DTahoma color=3D#000080 size=3D2><SPAN=20
class=3D210001418-08082002>In view of the interest in current =
cases rather=20
than 20-20 hindsight,<FONT color=3D#0000ff><SPAN=20
class=3D770040819-08082002> </SPAN><SPAN=20
class=3D770040819-08082002><FONT color=3D#000080>and discussions =
to aid the=20
learning process,</FONT> </SPAN></FONT> I offer XRAY as an =
example,=20
which broke out today from a CwH pattern with short=20
handle</SPAN></FONT></DIV>
<DIV><FONT face=3DTahoma color=3D#000080 size=3D2><SPAN=20
class=3D210001418-08082002></SPAN></FONT> </DIV>
<DIV><FONT face=3DTahoma color=3D#000080 size=3D2><SPAN=20
class=3D210001418-08082002>Firstly, let me add the disclaimer that =
I'm a=20
programmer who was introduced to CANSLIM as a development project, =
and I'm=20
1 year into the 3 yr learning curve, so further comment by the =
"experts"=20
is welcomed to improve my own understanding.</SPAN></FONT></DIV>
<DIV><FONT face=3DTahoma color=3D#000080 size=3D2><SPAN=20
class=3D210001418-08082002></SPAN></FONT> </DIV>
<DIV><SPAN class=3D210001418-08082002><FONT face=3DTahoma><FONT =
size=3D2><FONT=20
color=3D#000080>Firstly the fundamentals which are very strong, =
with the=20
exception that Institutional Ownership is already quite high. =
There are=20
differing views on what the level should be, but somewhere less =
than 30%=20
would be better.<SPAN =
class=3D770040819-08082002> </SPAN><SPAN=20
class=3D770040819-08082002>Additional DD would be required to =
determine why=20
pre-tax profit margins are decreasing and if that is =
cause for=20
concern. (This information is drawn from yahoo/multex not=20
IBD) </SPAN><SPAN=20
=
class=3D770040819-08082002> </SPAN></FONT></FONT></FONT></SPAN></DIV=
>
<DIV><FONT face=3DTahoma color=3D#000080 size=3D2><SPAN=20
class=3D210001418-08082002></SPAN></FONT> </DIV>
<DIV><FONT face=3DTahoma color=3D#000080 size=3D2><SPAN=20
class=3D210001418-08082002>
<TABLE cellSpacing=3D1 cellPadding=3D2 width=3D"100%" =
align=3Dcenter=20
bgColor=3D#5588bb border=3D0>
<TBODY>
<TR vAlign=3Dtop>
<TD align=3Dmiddle width=3D"5%" bgColor=3D#ffffff =
rowSpan=3D3><B><FONT=20
size=3D2>C</FONT></B></TD>
<TD align=3Dleft width=3D"15%" bgColor=3D#ffffff rowSpan=3D3>
<DIV align=3Dleft><FONT size=3D2>Current =
Earnings</FONT></DIV></TD>
<TD width=3D"30%" bgColor=3D#ffffff>
<DIV align=3Dleft><FONT size=3D2>Earnings per share growth =
of at least=20
25% in the most recent quarter</FONT></DIV></TD>
<TD width=3D"30%" bgColor=3D#ffffff>
<P align=3Dleft><FONT size=3D2>Most recent quarter year on =
year growth.=20
(Published financial data).</FONT></P></TD>
<TD align=3Dmiddle bgColor=3D#ffffff><FONT size=3D2>35.00 % =
</FONT></TD></TR>
<TR>
<TD width=3D"30%" bgColor=3D#ffffff>
<DIV align=3Dleft><FONT size=3D2>Latest three quarters of =
sales growth=20
should be a minimum of 25%</FONT></DIV></TD>
<TD vAlign=3Dtop width=3D"30%" bgColor=3D#ffffff>
<DIV align=3Dleft><FONT size=3D2>Average year on year growth =
for last 3=20
quarters. (Published financial data).</FONT></DIV></TD>
<TD align=3Dmiddle bgColor=3D#ffffff><FONT size=3D2>51.00 % =
</FONT></TD></TR>
<TR>
<TD vAlign=3Dtop width=3D"30%" bgColor=3D#ffffff>
<DIV align=3Dleft><FONT size=3D2>Sales growth should be =
accelerating.=20
</FONT></DIV></TD>
<TD vAlign=3Dtop width=3D"30%" bgColor=3D#ffffff>
<DIV align=3Dleft><FONT size=3D2>Difference in year on year =
growth rates=20
over last 3 quarters. (Published financial data). =
</FONT></DIV></TD>
<TD align=3Dmiddle bgColor=3D#ffffff><FONT size=3D2>23.00 =
</FONT></TD></TR>
<TR vAlign=3Dtop>
<TD align=3Dmiddle width=3D"5%" bgColor=3D#dddddd =
rowSpan=3D3><B><FONT=20
size=3D2>A</FONT></B></TD>
<TD align=3Dleft width=3D"15%" bgColor=3D#dddddd rowSpan=3D3>
<DIV align=3Dleft><FONT size=3D2>Strong Annual Earnings=20
Growth</FONT></DIV></TD>
<TD width=3D"30%" bgColor=3D#dddddd>
<DIV align=3Dleft><FONT size=3D2>Annual earnings growth for =
the last=20
three years of 25% or greater</FONT></DIV></TD>
<TD width=3D"30%" bgColor=3D#dddddd>
<DIV align=3Dleft><FONT size=3D2>3 year compound EPS growth =
rate.=20
(Published financial data).</FONT></DIV></TD>
<TD align=3Dmiddle bgColor=3D#dddddd><FONT size=3D2>53.00 % =
</FONT></TD></TR>
<TR vAlign=3Dtop>
<TD width=3D"30%" bgColor=3D#dddddd>
<DIV align=3Dleft><FONT size=3D2>Return on equity should be =
at least=20
17%</FONT></DIV></TD>
<TD width=3D"30%" bgColor=3D#dddddd>
<DIV align=3Dleft><FONT size=3D2>Published financial=20
data.</FONT></DIV></TD>
<TD align=3Dmiddle bgColor=3D#dddddd><FONT size=3D2>21.00 =
%</FONT></TD></TR>
<TR vAlign=3Dtop>
<TD width=3D"30%" bgColor=3D#dddddd>
<DIV align=3Dleft><FONT size=3D2>Pretax profit margins =
should be=20
increasing</FONT></DIV></TD>
<TD width=3D"30%" bgColor=3D#dddddd>
<DIV align=3Dleft><FONT size=3D2>Profit Margin for most =
recent quarter=20
minus profit margin 1 year ago. (Published financial=20
data).</FONT></DIV></TD>
<TD align=3Dmiddle bgColor=3D#dddddd><FONT size=3D2>-1.00 =
</FONT></TD></TR>
<TR vAlign=3Dtop>
<TD align=3Dmiddle width=3D"5%" bgColor=3D#ffffff><B><FONT=20
size=3D2>N</FONT></B></TD>
<TD align=3Dleft width=3D"15%" bgColor=3D#ffffff>
<DIV align=3Dleft><FONT size=3D2>New Products, Services or=20
Leadership<FONT class=3Dfont5> </FONT></FONT></DIV></TD>
<TD width=3D"30%" bgColor=3D#ffffff>
<DIV align=3Dleft><FONT size=3D2>If a company has a dynamic =
new product=20
or service, or is capitalizing on new conditions in the =
economy,=20
this can have a dramatic impact on the price of a stock. Buy =
stocks=20
just as they emerge from a sound "base" pattern and make new =
price=20
highs. </FONT></DIV></TD>
<TD width=3D"30%" bgColor=3D#ffffff><FONT size=3D2>Not =
Known</FONT></TD>
<TD align=3Dmiddle bgColor=3D#ffffff><FONT =
size=3D2> </FONT></TD></TR>
<TR vAlign=3Dtop>
<TD align=3Dmiddle width=3D"5%" bgColor=3D#dddddd><B><FONT=20
size=3D2>S</FONT></B></TD>
<TD align=3Dleft width=3D"15%" bgColor=3D#dddddd>
<DIV align=3Dleft><FONT size=3D2>Supply and Demand =
</FONT></DIV></TD>
<TD width=3D"30%" bgColor=3D#dddddd>
<DIV align=3Dleft><FONT size=3D2>Watch the demand for shares =
by looking=20
at the percentage change in volume for each of your stocks. =
Analyze=20
a stock's daily and weekly price and volume changes.=20
</FONT></DIV></TD>
<TD width=3D"30%" bgColor=3D#dddddd>
<DIV align=3Dleft><FONT size=3D2>The up/down volume ratio =
measures the=20
ratio of accumulation days to distribution days over the =
last 50=20
days.</FONT></DIV></TD>
<TD align=3Dmiddle bgColor=3D#dddddd><FONT size=3D2>0.90 =
</FONT></TD></TR>
<TR vAlign=3Dtop>
<TD align=3Dmiddle width=3D"5%" bgColor=3D#ffffff =
rowSpan=3D3><FONT=20
size=3D2><B>L</B><B></B></FONT></TD>
<TD align=3Dleft width=3D"15%" bgColor=3D#ffffff rowSpan=3D3>
<DIV align=3Dleft><FONT size=3D2>Leading Stocks in Leading =
Industry=20
Groups </FONT></DIV></TD>
<TD width=3D"30%" bgColor=3D#ffffff rowSpan=3D2>
<DIV align=3Dleft><FONT size=3D2>Nearly 50% of a stock's =
price action is=20
a result of its industry group's performance. Focus on the =
top=20
industry groups, and within those groups select stocks with =
the best=20
price performance.</FONT></DIV></TD>
<TD width=3D"30%" bgColor=3D#ffffff height=3D"50%">
<DIV align=3Dleft><FONT size=3D2>Multex Industry Rank ( 0 - =
99 )<BR>(26=20
week relative performance).</FONT></DIV></TD>
<TD align=3Dmiddle bgColor=3D#ffffff><FONT size=3D2>90 =
</FONT></TD></TR>
<TR vAlign=3Dtop>
<TD width=3D"30%" bgColor=3D#ffffff height=3D"50%">
<P align=3Dleft><FONT size=3D2>Multex Rank within Industry ( =
0 - 99 ).=20
Provided for informational purposes only.<BR>(4 week =
relative=20
performance)</FONT></P></TD>
<TD align=3Dmiddle bgColor=3D#ffffff><FONT size=3D2>22 =
</FONT></TD></TR>
<TR vAlign=3Dtop>
<TD width=3D"30%" bgColor=3D#ffffff>
<DIV align=3Dleft><FONT size=3D2>The stock's Relative Price =
Strength=20
Rating should be in the 80s or 90s </FONT></DIV></TD>
<TD width=3D"30%" bgColor=3D#ffffff>
<DIV align=3Dleft><FONT size=3D2>We calculate RS daily by =
ranking all=20
NYSE, AMEX and NASDAQ stocks. Our RS algorithm is </FONT><A=20
=
onclick=3D"MM_openBrWindow('html/rs.html','','scrollbars=3Dyes,resizable=3D=
yes,width=3D500,height=3D500')"=20
href=3D"file:///H:/cwhcharts/TMP1m5cljfr3.htm#"><FONT =
size=3D2>described=20
here</FONT></A><FONT size=3D2>. It correlates well with =
IBD's. Value.=20
Score pro-rated in range 60-79.</FONT></DIV></TD>
<TD align=3Dmiddle bgColor=3D#ffffff><FONT size=3D2>83</FONT> =
</TD></TR>
<TR vAlign=3Dtop>
<TD align=3Dmiddle width=3D"5%" bgColor=3D#dddddd =
rowSpan=3D2><B>I</B></TD>
<TD align=3Dleft width=3D"15%" bgColor=3D#dddddd rowSpan=3D2>
<DIV align=3Dleft><FONT size=3D2>Institutional=20
Sponsorship</FONT></DIV></TD>
<TD width=3D"30%" bgColor=3D#dddddd rowSpan=3D2>
<DIV align=3Dleft><FONT size=3D2>You want at least a few of =
the better=20
performing mutual funds owning the stock. They're the ones =
who will=20
drive the stock up on a sustained basis.</FONT></DIV></TD>
<TD width=3D"30%" bgColor=3D#dddddd>
<DIV align=3Dleft><FONT size=3D2>Institutional Ownership. =
Value in range=20
5 - 30% needed to score 1.</FONT></DIV></TD>
<TD align=3Dmiddle bgColor=3D#dddddd><FONT size=3D2>79.00 % =
</FONT></TD></TR>
<TR vAlign=3Dtop>
<TD width=3D"30%" bgColor=3D#dddddd>
<DIV align=3Dleft><FONT size=3D2>No. of Institutions. =
Provided for=20
informational purposes only.</FONT></DIV></TD>
<TD align=3Dmiddle bgColor=3D#dddddd><FONT size=3D2>568 =
</FONT></TD></TR>
<TR vAlign=3Dtop>
<TD align=3Dmiddle width=3D"5%" bgColor=3D#ffffff><B><FONT=20
size=3D2>M</FONT></B></TD>
<TD align=3Dleft width=3D"15%" bgColor=3D#ffffff>
<DIV align=3Dleft><FONT size=3D2>Market Direction =
</FONT></DIV></TD>
<TD width=3D"20%" bgColor=3D#ffffff>
<DIV align=3Dleft><FONT size=3D2>You can buy the best =
stocks, but if the=20
general market is weak, most likely your stocks will be weak =
also.</FONT></DIV></TD>
<TD bgColor=3D#ffffff>
<DIV align=3Dleft><FONT size=3D2>Because Market Direction is =
not=20
specific to any one particular stock, we do not evaluate it =
on a per=20
stock basis.</FONT></DIV></TD>
<TD align=3Dmiddle=20
=
bgColor=3D#ffffff> </TD></TR></TBODY></TABLE></SPAN></FONT></DIV>
<DIV><FONT face=3DTahoma color=3D#000080 size=3D2><SPAN=20
class=3D210001418-08082002></SPAN></FONT> </DIV>
<DIV><FONT face=3DTahoma color=3D#000080 size=3D2><SPAN=20
class=3D210001418-08082002>Look at the chart below. Note that the =
handle is=20
only 3 days long. This is normally insufficient to have shaken out =
the=20
potential sellers and WON recommends that a handle should be at =
least 1-2=20
weeks long, otherwise a breakout is prone to failure. Also the =
volume in=20
the handle has not dried up. This is often the case in the early =
days of=20
handle formation and we would like to see the volume decrease =
below the=20
ADV and the price wedge downwards as the handle=20
progresses.</SPAN></FONT></DIV>
<DIV><FONT face=3DTahoma color=3D#000080 size=3D2><SPAN=20
class=3D210001418-08082002></SPAN></FONT> </DIV>
<DIV><FONT color=3D#000080><SPAN class=3D210001418-08082002><FONT=20
face=3DTahoma><FONT size=3D2>Look at the volume coming up the =
right side of=20
the cup - consistently above the 50 ADV accompanied by big price =
positive=20
price movements, with only two days when the stock closed slightly =
down.=20
It would have been better if the volume had been below the ADV on =
those=20
days, in which case the stock would have earned a higher CQ (Chart =
Quality) score.<BR></FONT></FONT></SPAN></FONT><FONT =
color=3D#000080><SPAN=20
class=3D210001418-08082002><FONT face=3DTahoma><FONT =
size=3D2><SPAN=20
=
class=3D260395018-08082002></SPAN></FONT></FONT></SPAN></FONT></DIV>
<DIV><SPAN class=3D210001418-08082002><FONT color=3D#000080><SPAN=20
class=3D260395018-08082002><BR><FONT face=3DTahoma><FONT =
size=3D2><SPAN=20
class=3D770040819-08082002><FONT =
color=3D#0000ff> </FONT></SPAN>Note the=20
RS line. This is quite high at 83, but has advanced<SPAN=20
class=3D770040819-08082002><FONT color=3D#0000ff><FONT =
color=3D#000080> only=20
slightly</FONT> </FONT></SPAN>over the last few days despite=20
significant price gains in this stock. This indicates that other=20
stocks are doing at least as=20
well.</FONT></FONT></SPAN></FONT></SPAN></DIV>
<DIV><FONT size=3D+0><SPAN class=3D210001418-08082002><FONT =
face=3DTahoma><FONT=20
color=3D#000080 size=3D2><SPAN=20
=
class=3D260395018-08082002></SPAN></FONT></FONT></SPAN></FONT> </DIV=
>
<DIV><FONT size=3D+0><SPAN class=3D210001418-08082002><FONT =
face=3DTahoma><FONT=20
color=3D#000080 size=3D2><SPAN class=3D260395018-08082002>The 50 =
day up/down=20
volume is at 0.90. Values less than 1 mean that the down volume =
days=20
exceed the up volume days. However, the trend of the line is =
upwards,=20
which is a positive sign.</SPAN></FONT></FONT></SPAN></FONT></DIV>
<DIV><FONT size=3D+0><SPAN class=3D210001418-08082002><FONT =
face=3DTahoma><FONT=20
color=3D#000080 size=3D2><SPAN=20
=
class=3D260395018-08082002></SPAN></FONT></FONT></SPAN></FONT> </DIV=
>
<DIV><SPAN class=3D210001418-08082002><FONT face=3DTahoma =
color=3D#000080=20
size=3D2><SPAN class=3D260395018-08082002> <SPAN=20
class=3D770040819-08082002>I'll go out on a limb and =
say m</SPAN>y=20
guess is that todays breakout will not be sustained<SPAN=20
class=3D770040819-08082002> (although its holding now -=20
just) </SPAN>and it will continue to form a handle.=20
</SPAN></FONT></SPAN></DIV>
<DIV><FONT size=3D+0><SPAN class=3D210001418-08082002><FONT =
face=3DTahoma><FONT=20
color=3D#000080 size=3D2><SPAN=20
=
class=3D260395018-08082002></SPAN></FONT></FONT></SPAN></FONT> </DIV=
>
<DIV><FONT size=3D+0><SPAN class=3D210001418-08082002><FONT =
face=3DTahoma><FONT=20
color=3D#000080 size=3D2><SPAN class=3D260395018-08082002><SPAN=20
class=3D210001418-08082002><FONT face=3DTahoma><FONT =
color=3D#000080=20
size=3D2><SPAN class=3D260395018-08082002>I conclude that this is =
one to watch=20
but not to buy right=20
=
now.</SPAN></FONT></FONT></SPAN></SPAN></FONT></FONT></SPAN></FONT></DIV>=
<DIV><FONT size=3D+0><SPAN class=3D210001418-08082002><FONT =
face=3DTahoma><FONT=20
color=3D#000080 size=3D2><SPAN class=3D260395018-08082002><SPAN=20
class=3D210001418-08082002><FONT face=3DTahoma><FONT =
color=3D#000080=20
size=3D2><SPAN=20
=
class=3D260395018-08082002></SPAN></FONT></FONT></SPAN></SPAN></FONT></FO=
NT></SPAN></FONT> </DIV>
<DIV><FONT face=3DTahoma color=3D#000080 size=3D2><SPAN=20
class=3D210001418-08082002><IMG alt=3D"" hspace=3D0=20
src=3D"cid:317335419@08082002-0a80" align=3Dbaseline=20
border=3D0></SPAN></FONT></DIV>
<DIV><FONT face=3DTahoma color=3D#000080 size=3D2><SPAN=20
class=3D210001418-08082002></SPAN></FONT> </DIV>
<DIV><FONT face=3DTahoma color=3D#000080 size=3D2><SPAN=20
class=3D210001418-08082002></SPAN></FONT> </DIV>
<DIV><FONT face=3DTahoma color=3D#000080 size=3D2><SPAN=20
class=3D210001418-08082002></SPAN></FONT><FONT face=3DTahoma =
color=3D#000080=20
size=3D2>Aloha,</FONT></DIV>
<DIV><FONT face=3DTahoma color=3D#000080 =
size=3D2></FONT> </DIV>
<DIV><FONT face=3DTahoma color=3D#000080 size=3D2>Mike =
Gibbons</FONT></DIV>
<DIV><FONT face=3DTahoma color=3D#000080 size=3D2>Proactive =
Technologies,=20
LLC</FONT></DIV>
<DIV><FONT face=3DTahoma color=3D#000080=20
size=3D2>http://www.proactech.com</FONT></DIV>
<DIV><FONT face=3DTahoma color=3D#0000ff=20
=
size=3D2></FONT> </DIV></BLOCKQUOTE></BLOCKQUOTE></BLOCKQUOTE></BODY=
></HTML>
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