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Strategies & Market Trends : The Rational Analyst -- Ignore unavailable to you. Want to Upgrade?

To: HeyRainier who wrote (25)	12/15/1997 9:45:00 PM
From: Chris	Respond to of 1720

[chat] 100% agree on your reply.. one pick is too limiting..

To: HeyRainier who wrote (25)	12/15/1997 10:11:00 PM
From: ftth	Read Replies (2) \| Respond to of 1720

[Starting Point] Here's a list as a starting point--based on fundamentals only: top 30% last qtrs EPS % increase, prior qtr >25%, 3-5 yr growth rate top 30%, shares outstanding <25 mil, institutional sponsorship, positive earnings surprise last 2 qtrs, Debt/Equity<32%, at least 2 analysts follow, Net inc & op cash flow showing positive trend past 3 fiscal years. If data wasn't available, it counts as a non-factor, so double check the data. Also, no database is flawless, so 2nd sources are most appreciated. I have used this scan successfully in up markets, and these would be good CANDIDATES if technicals were good if we were in an up market. But just to get a dialog going, everyone please investigate further and comment. Note: this is based on End of November data...any recent news items (i.e. SLOT) are not reflected. MCRL ACTN ZOLT RCII CDWC ACCS HP SLOT DCO GSMS EXPD TUES ASGN ATR TGIC BKE RHBC MAIR regards, dh

To: HeyRainier who wrote (25)	12/15/1997 10:37:00 PM
From: Chris	Read Replies (1) \| Respond to of 1720

[good post on using TA on stocks] Rainier, even though we know $1-$5 stocks gain the best when they fly, we must be wary that TA (at least mine) isn't as good for these stocks vs $10->$20 stocks. something to consider.. ubject: STOCKS WITH ATTITUDE TEAM - FA/TA AND EVERYTHING ELSE \| Previous \| Next \| Respond \| To: +sergio heiber (47 ) From: +Christopher Smith Sunday, Dec 14 1997 12:51AM EST Reply # of 388 I've been checking in on the 56 threads often during the past few months, usually out of curiousity more than anything else. I have just registered for SI, thus no posts from me until now. During the past few months several things about the group's activity have stuck out, and I wonder if some of you would respond to the following questions. By way of background, I will say that I am a marketmaker with one of the largest investment banks/trading houses in the world...since I do not want to specify which one, I will only say I work for either GSCO, MLCO, MSCO, or BEST. As a result, I believe I bring a certain degree of saavy and knowledge about the issues (especially regarding marketmaker activity) that some of you seem to think you are qualified to comment on. 1. I have been struck by this group's obsession with stocks in the $1-$10 range. The firm I work for has an extremely sophisticated, high-powered technical analysis department, and I know the value of good TA. Like your member "Doug R", I consider myself extremely competent in the area of TA and apply it daily when evaluating my proprietary positions and inventory levels. Anyone who knows ANYTHING about technical analysis knows that it is most effective as a predictor of future activity for stocks OVER $10. Applying TA to stocks under $10, and especially penny stocks under $5, is completely ludicrous. Just one of the reasons for this is that TA, on a basic level, attempts to identify trends in price activity from which one can profit. Stocks under $10 do not experience the consistent buying and selling activity of larger stocks. Example: as a marketmaker, I will have a customer, such as a mutual fund, come in one day and buy a large block of a $30 stock. The next day, the fund will buy another block. Often, that customer will be joined by another, such as a hedge fund...this usually goes on for days or weeks, since many of these institutions identify the same types of desirable stocks at the same time. This creates a clear pattern in the chart of the stock, which creates great trading opportunities for those utilizing good TA. These patterns almost NEVER exist in penny stocks, since most activity in these issues is retail and short term speculation, not institutional activity. If you are a short term trader, fine...just don't use TA to justify buying or selling a penny stock to the extent you would a more respectable one, because you'll be comparing apples and oranges. <other stuff deleted>