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Strategies & Market Trends : FOLLOW THE GENERALS

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From: Jim Battaglia	5/30/2006 6:33:49 AM
	of 104

IBD Stock Analysis Pawn-shop operator First Cash Financial Services broke out of a five-week flat base in January in above-average trade (Point 1). It rallied 19% to an intraday high of 17.88 on Jan. 27 on its largest volume since July 2004. The stock then pulled into a tight trading pattern for three weeks (Point 2). Such tight trade often precedes further upside action because big investors are quietly accumulating stock. Investors who took this opportunity to add shares were rewarded: First Cash rallied 6% the week ended Feb. 24, and went on to reach an all-time high of 22.99 the week ended April 21 (Point 3). As the stock has risen, it’s flashed several weeks of heavier-than-normal accumulation, a constructive sign (Point 4). That means institutional investors are buying. After running up to its April high, the stock pulled back, but volume on downside weeks trended lower, also a good sign. In addition, even during weeks in which the stock ended lower, weekly closes were at the high end of the trading range, another positive indicator (Point 5). It’s closed near its 10-week line the past two weeks.

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