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To: Susan Saline who wrote (53)	12/19/1999 8:14:00 PM
From: Sam Raven	Respond to of 1567

Susan, I guess the best way to explain a Category 2 is to start with a Category 1. A Category 1 is a stock that has within a day or two of a volume spike (over 110% of average). This can be from a channel breakout, dish, cup lip, handle or even just after it has entered a Category 3 range. Sometimes the price change in a Category 1 is not significant when it is identified, but the volume increase is. Category 2 would be anything after Category 1 and until some profit taking comes in, a Category 2 stock is often extended. Category 2 stocks may, and often do continue to go up, but are better daytrades because of the inevitable profit taking that comes in. Category 3 is the result of that profit taking, and shows a trailing off of volume. Category 3 is my preferred trade, however, they don't tend to be as exciting on the first day or two you get into them. ECLP was a Category 3 stock before we alerted on the 14th. The usual profit goes more by days held, as opposed to price. I usually recommend that a position be held from 3 to 5 days. But, like you did, on the short-term trades, I recommend taking profits on the first downtick if it gaps up, on or after holding 3 days. A lot depends on the stock and the health of the market too. I know that a couple of the people trading our alerts are holding beyond 5 days and making good gains. They often have a buffer between the current price and the buy price allowing some running room. The minimum profit target you mentioned is exactly why we don't usually list Category 2 stocks. The potential of a dollar gain before a stop is less than for other stocks. The current watchlist has the mostly stocks that we have had before. TSCC we have had several times, and even used it as an example in a class of a perfect Category 3, cup and handle stock, last September. When it was 14 dollars a share. Now that it is back to a Category 3 it may be worth watching. NTPA is one we haven't had for a couple months, and I'm looking forward to seeing how it does. One thing I don't like about it is the moneyflow. BRYO and CATP we have had several times as well, and this is another opportunity to enter at a better price. Hope the Category explanation eased your curiosity somewhat, if not, I'll try again. Sam www.savvy-trader.com