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Biotech / Medical : CEPH - CEPHALON -- Ignore unavailable to you. Want to Upgrade?

To: Jon Khymn who wrote (21)	12/3/2002 4:57:28 PM
From: RMP	Read Replies (1) \| Respond to of 109

Individual stocks and money flow To buy individual stocks after we've seen a trend established, we look for positive trends in the money flow. This is a matter of tracking the purchases and sales of individual stocks by the world's biggest financial institutions -- the so-called “smart money” that is always first in and first out of the huge moves in prices. These giant financial institutions are like elephants: They leave big footprints. As a private investor, you want to follow those footprints because they mean good support for a stock. The reason stocks go up is that there are more big buyers than big sellers, and if you can find the stocks where the imbalance is greatest before the rest of the crowd, you will find the greatest winners. Money flow is again more art than science, however. You are mainly looking for divergences. If a stock makes a new high, you want the money flow to make a new high. The money flow should therefore mirror the stock chart. When it doesn't, you've got trouble. In other words, when a stock is making new highs and the money flow begins to decline in advance of the move, then you have distribution -- or selling. This is particularly true when a stock is making new highs on weaker and weaker volume The above was from moneycentral.msn.com The links below may provide some info on money flow, marketscreen.com

To: Jon Khymn who wrote (21)	12/3/2002 9:47:59 PM
From: pchristi12534	Respond to of 109

Perhaps the best way to explain the theory of positive and negative money flow is with an illustration. Imagine that you're an institutional investor and you want to eventually own 500,000 shares of CEPH. Like any investor, you always have the option as to when and at what price you will buy the stock. If the stock is drifting lower, clearly the wisest course of action would be to accumulate the stock on downticks as prices steadily drop. A diversion - Money Flow measures the daily difference between all trades done on downticks and all trades done on upticks. If MF is positive, then there have been more trades done on upticks - negative MF would be just the opposite. Net upticks suggest that buyers have been more aggressive or more anxious to buy - net downticks suggest that sellers have been more aggressive or more anxious to sell. Getting back to the illustration, if you were convinced that CEPH was not going much lower and that it would be much higher sometime in the future, you might be aggressive and buy the stock on upticks, rather than simply accumulate it on the way down. Basically that's the theory behind Money Flow analysis - more specifically, Money Flow Divergence. Divergence works both ways. Positive MF Divergence occurs when prices close lower than the preceding day but MF was positive. Negative MF Divergence occurs when prices close higher than the preceding day but MF was negative. The latter situation suggests that sellers were anxious to dump the stock, believing that prices wouldn't go much higher and were ultimately going lower. This psychological theory doesn't have much relevance unless the divergence persists for an extended period of time - such as CEPH, which today recorded its 11th day -out of 20 - with Positive MF Divergence. Somebody obviously believes that the stock is going higher - at least they're giving clear indications that they're anxious to own the stock. Hope this helps.