Stock Picks Q&A   View Select Entries from Our Mailbag. Also See Our Q&A Page.

Q: Could you elaborate on the reasons for these two additions - P*** and G***? Thank you in advance.

A: Hi,

Most of the stocks that make our Top Stock Picks, P*** and G*** included, usually demonstrate the following characteristics:

1. High GSA Rank, EPS Growth and Strong Relative Strength.
2. Strong Accumulation/Distribution.
3. Mostly members of strong groups (P*** - Group Action 5, G*** - Group Action 4).
4. Breaking out of Base Patterns, or Breaking a Down Trendline on strong volume. P*** broke out on Wednesday, G*** on Thursday.
5. Base Pattern should not be more than 25% in depth, i.e., the stock should have corrected no more than 25% during the basing period. P*** corrected 24%, G*** 17%.
6. Finally, the stock should show a strong uptrend prior to the most recent base formation. We check the 2- or 3-year chart pattern to see the longer term trend of the stock.

These are our most important criteria. Hope that helps.

GSA

Q: What is the best way to use your service? Can you provide some step by step advice.

A: Hello,

Hope these pointers help you:

1. You want to buy stocks with strong GSA Rank, EPS Growth with ideal chart patterns.
2. The stock should ideally be breaking out of a good basing pattern to time your purchase correctly. Please see our Outstanding Chart Patterns page and our Performance page to learn what chart patterns have worked best.
3. You may also use our 3-Step Search Wizard to quickly filter down potential buy candidates.
4. Also see our Help page to understand our screening criteria.

Hope that helps.

GSA

Q: Is there any way to receive personal search alerts on an hourly basis? E.g. if I am looking at upside base breakouts with other selected criteria? >I think you guys are doing a great job and I thank you in advance

A: Hi, You can receive the Daily Report on an hourly basis, with filtered results. For example, you can filter for GSA Rank, EPS Growth, A/D, Discount%, Price, %off 52wk High, and Vol%. Since we already have a section on base breakouts, you may be able to achieve most of what you need. We realize that not all screening criteria are present in the Daily Report, but we've provided the most relevant ones. Also, most of our data except stock price, change and volume traded, is updated only once daily at 7pm. So you will probably receive almost the same search results if received hourly. For the parameters that change (price, change, vol), use the filtered Daily Report. Hope that helps.

GSA

Q: I am a new subscriber and am trying to accustom myself to your site. On the breakouts, you advise not to buy if the stock has run more than 5%.

By the time I get the email, these have mostly seemed to run 10-15% or more.

Any tips?

Also: in the above case, would you buy the stock when it pulled back from the initial breakout?

And as to your last pick ****. It has gone nowhere since you bought it; it traded down. As a subscriber (and in general, not necessarily specific to ****) would that be an opportunity to buy, or would you consider that to have been weakness that would negate buying?

Thank you

A: Hi,

It is very important to buy the breakout as soon as it happens. Sometimes, this will be within 5% of the pivot point or previous high. Many times, specially on a huge breakout, the breakout will happen before you or I will be able to catch it. In such a case, it is important to still buy, even if a slight run-up of +10% has happened. Depending on the quality of the breakout (tight base, good volume on breakout), we will get in, even if it means a slightly higher price. See the recent breakout on Sonic Solutions (SNIC). This went on to a 75% gain.

We have a Breakout Section on our Daily Report, which you can receive hourly during the trading day. There should be no reason to be late by 10-15% on the breakout, unless the stock went up this much within an hour or so. If we missed buying on the breakout, then one could purchase on the pull-back provided the pull-back came on lower volume, and did not retrace more than 50% of the breakout move. In most cases, we buy on the breakout, even if we have to pay more.

**** is still holding up well in our database ranking. The chart pattern is still very healthy. We have high hopes for ****. One could consider buying, if the price action still shows accumulation and not distribution. See a daily chart, and try and observe the up volume to down volume in the recent days or weeks after the breakout. That will provide you with some clues as to whether to buy or not.

Hope that helps.

GSA

Q: I am a new subscriber and have a question - when several daily stock picks are given, how do you select the one to buy for your portfolio? Or, are all your results based on buying them all each day? Thanks.

A: Hi,

If several stocks make our Top Stock Picks list, then we buy all of them provided we have investment funds in our portfolio available. These are stocks that we've done our due diligence on, and so feel comfortable buying at the market.

Other additions to our portfolio come from our newly introduced "Trader's Corner" feature. Since this is an automated system, we then look at the chart patterns before purchase, and only buy the ones with the best looking breakouts. So in this case, our selection is a bit more subjective.

Hope that helps.

GSA

Q: I recently got a membership to GSA and was hoping you could help me identify stocks a little bit a head of time before they break out. I really like your service...and not just gamble in the market.

My main problem is that i prefer to find a stock that has based a long period of time more than 2 months with lower volitility and watch it the last week to two weeks or so as it prepares its breakout to see how it is trading. I believe that if you watch how a stock trades you can get a more accurate feel for when to sell the stock. That being said I'm having a very difficult time finding any companies on the list that aren't listed very poorly or not at all that are basing in this manner. Can you identify a few for me to watch that have been buliding a base for quite some time or is the market just as a point that most stocks have already broken out somewhat and may need a few months to re-base?

Also, i have been getting conflicting information based on the listings on the Database EPS growth in previous quarters and as compared to the previous year and moreover how the undervalued and overvalued aspects are determined.

If you could help me in any way i would appreciate it! Thanks for your great service and I hope to find some real market leaders to invest in for the next few months to few years.

A: Hi,

It is our opinion not to try to predict when a stock will breakout. We could be following stocks that are in a basing pattern that might continue for weeks or even months. Wouldn't a better strategy be to jump in on a stock that has demonstrated a positive breakout, and focus our efforts there? That's just our opinion and our approach. I tried analyzing our database to see if there was a filter that could do what you were requesting, and could not come up with an easy answer. The best strategy would be to cycle through all our charts in the Chart Fest section, and visually look for the basing pattern. I did a quick visual scan and found AHMH, MRVL, ECLG as some with short-to-medium bases. Sorry to not offer you a better solution at this point.

You are correct about the market not offering up too many basing stocks or breakouts. It has been a great year for us, with several stocks having already made significant runs. Maybe we'll consolidate a bit, then find other bases and breakouts.

Let us know which specific EPS growth numbers you are finding to be conflicting and we can investigate more. There may be some errors in data, which we have no control of. The undervalued and overvalued calculations are described on the Help page. Basically it looks at the Forward 12-month PE divided by the Projected 5 yr Growth Rate, expressed as a percentage. The calculation is shown on our Help page under "Stock's Discount".

Apologize again to not offer you a better response on your basing strategy, but trust us - wait until the breakout. It will save you time and energy and will channel your money into those stocks that may have demonstrated the beginning of a good move.

Best Regards,

GSA

Q: Dear GSA:

I've just signed recently for a trial subscription and by now I'm positively sure that I will extend my subscription for a longer term.

I have two questions regarding your services, one is technical and another one relates to the site structure.

1. How do you measure a base when you are talking about 'small base', for instance?

2. You state on the site that your portfolio is XX% invested. However, unlike with other stock pick sites, I was unable to find the current portfolio listing itself. What are the stocks in your current portfolio? I think that it would definitely add to the credibility of your service if you have a separate page for current stocks in play.

Thank you!

A: Hi,

Answers to your questions:

1. We measure bases by the number of weeks of sideways price action. We like to see at least 8 weeks of consolidation or basing. Anything less than that is considered a 'smaller base.'

2. We have now made the GSA Portfolio %Invested a link that shows you what we are holding. Click on it and you will see our current holdings. We have yet to buy our newest Top Pick XXXX, this morning.

Hope that helps.

Best Regards,

GSA

Q: I've only been a member for a week and am still getting used to the system. I purchased Bennett Environmental last week as I knew it was a CDN company and already held some in my retirement plan. I note it now seems to have the highest GSA score going into a new week which I assume is very +ve. I noticed some stocks have a high GSA score but some measurements are red, which I believe is a warning sign - how do you interpret this situation, i.e., when one of the categories is red.

A second question is regarding Bennett Environmental. You presently don't have a preset profit target assigned to it - what is your rule of thumb for selling? Thanks for your assistance - my experience so far has been most impressive.

A: Yes, the higher the GSA rank, the more positive we would be on the company. We would ideally like all the important criteria to be met, before we purchase, but that may not be the case in all situations. If one or two or the criteria are not met (shown in red), we would still consider the stock, but it would depend on the criteria. Also, a perfect chart pattern would help alleviate the risk of one or two of the criteria not being met.

We only assign a preset profit target to our Top Stock Picks, because those are the ones we closely monitor and trade for our portfolio. Our rule of thumb for selling is to sell at 25% to 30%, but not within the first 8 weeks. This rule stands only if we aren't stopped out at -10% to -12%, and the stock doesn't flash any volume alerts, or new high alerts as indicated on our Portfolio Alerts page.

Best Regards,

GSA

Q: Hi GSA,

Question, there are too many leader stocks out there; but why is your Top Pick not a leader stock coming out from another advance. I knew one has to look at a sound chart base, technical, fundamental factors, and so on. However, there are some top leaders such as coh, mtlg, bcgi, chs, stst, that just broke out today from their base on base patterns. Some broke out from their correction, and some broke out from their handle, they still have a lot of potential to break out for another huge advance...syno, appx, lf, and so on seem like breaking out and ready to take another ride of rising prices. Could you tell me what made you so confident with your top stock picks such as heph, mrge, talk which are not all leaders and some even have weak fundamentals. Thank you very much and thanks again for your top pick.

From a learning investor.

A: Hi,

A few general comments - we define "leader stocks" as stocks that have a high GSA rank in our database. So our definition of leader stocks may be a little different from what you are referring to. Let's go through your list and here are our comments as to why we didn't post any of these stocks as Top Stock Picks:

COH: Small 6 week base breakout. We like to see 8 weeks mimimum basing period.
MTLG: Not in our database.
BCGI: We were going to post this as a Top Pick today, but didn't like the A/D rank - C.
CHS: B+ ranking, A/D rank C.
STST: Small 4 week base breakout.
SYNO: B+ ranking, overvalued, small base breakout.
APPX: Small 6 week base breakout. We still hold APPX in our portfolio, since it is a recent pick.
HEPH, MRGE, TALK: Even though their fundamentals may not have been steller, they all had outstanding chart patterns, and a high GSA Rank, which are the factors we depend on most.

The base-on-top-of-a-base that you mention is a great chart pattern - we just want to see slightly longer basing periods before buying.

Best Regards,

GSA

Q: Could you tell me how today`s top pick, XXXX, is also a short candidate in the Daily Report? I am a new member and have great success with your stock picks to date.

A: Hi,

The short list on our Daily Report is a list that is auto generated - stocks reversing off new highs, stocks moving down on high volume, stocks 150% or more above 200 day MA, stocks with RS=99, etc. You must not short these stocks just because they show up on this list. Always, always check the chart pattern to see if the stock is truly extended, specially if the GSA Rank is high. Consider shorting only if a stock is 150-200% or more above it's 200 day MA, and another confirming factor has been identified - reversing off a high or a high volume breakdown. That's why we show all the short factors listed for a particular stock. So, look for those stocks that have multiple factors listed, e.g., RS=99.>150% Above 200day MA.Reversing Off New High. and then check the chart pattern. Shorting is difficult, and must be done very selectively. Hope that helps.

Glad to hear that our Top Stock Picks have worked for you. Our own portfolio is sitting pretty too - knock on wood. There's an old saying on Wall Street - "Don't confuse a bull market with brains." The recent run-up in stocks sure has helped our stock picks.

Best Regards,

GSA

Q: Dear Sir,

I have been trying to follow stock breakouts. I only recognize the breakouts after the stock is to far extended. I am trying this to see if you can help me.

A: Hi, There are at least 2 areas in our service that can benefit you immediately:

1. Search for "Base Breakouts" on a daily basis to find stocks breaking out of bases that are anywhere from 8 to 52 weeks in duration.
2. View our Daily Report during market hours. It also has a section on Base Breakouts. This report is updated every half hour on our site. You may opt to receive it via email every hour, 2 hours, 4 hours or at the end of the trading day.

Hope that helps,

GSA

Q: Hi GSA,

I'm on the trial period. I saw that **** was the top pick on 5/19/03 at 10.23, but you are now ranking it as B+ with 52 week high on low volume, plus today's fall on triple volume compared to its average volume. Does this mean that institutions have starting selling it? Should I take profits now because **** has exceed your profit range 20-25%? or should I put it on hold? I have learned that when a stock forms a long base it signals that it has strong support. **** has a 28-36 week base, is it a long base? It has pretty slow volume on its handle, with some high volume on its breakout. Even last week it traded more than 1.5 million shares. Does this mean more institution were buying this stock? So what should I do now to avoid losing my profit?

P/S I really enjoy using your site, and am thinking to renew it for half a year. Looking forward to your help.

A: Yes, We saw the high volume selling on ****. We cannot advise you on whether to hold or sell. However, here are some things you should consider. **** doesn't have excess institutional support, so there is less chance for large-scale selling. The long base breakout on **** was a great chart pattern. Our experience has been that longer the base, larger is the % price move once the breakout happens. Sometimes our ranking will fall when the stock appreciates a lot. A B+ is no reason to sell. There are other positives - great analysts rank, deep discount from a valuation standpoint, great accumulation, etc.

We'll be watching the action in the next few days to see if we get other sell signals or we see strong volume updays, which would cancel the action we're seeing now. We are planning to hold **** at this point.

Best regards,

GSA

Q: Dear Sir,

I am confused. I see pktr, crdn, askj, fdcc, cmtl, and yesterday mrge are on the daily report as shorts. At least - 3 crdn, fdcc, mrge have what appear to have excellant numbers and comments. Why then shorts?

A: The short list is simply another filter on our Daily Report. The candidates that make this list have RS of 99 or 100% above 200 day MA, or are reversing off their highs. Please check the chart pattern to see if the stock price is extended before considering it to be a short. In fact, we should really look at stocks more than 150% above their MA. I think we will tighten up this filter some more.

A strong GSA Rank doesn't prevent the stock from being a short if the technicals have broken down as explained above. Often, strong stocks will move to these extremes, and could be good potential shorts. Finally, take quicker profits on shorts - 10 to 15%.

GSA

Q: I am really enjoying my trial run with your site. It is the next logical step and the missing piece for me...

I have a question on the HI-EPSRS report. Two numbers are given for the Quarterly EPS. Which is the most recent quarter, the first number or the second one?

Thanks

A: Glad to see that your are finding our service useful. The first EPS number is the most recent quarterly % increase. The second one is for the previous quarter.

Best regards,

GSA

Q: Hello:
I am on trial of your excellent service. My question is How do I use the daily reports which are emailed at different time frames. What should I be looking for? Thanks.

A: Hi,

The daily reports are shown in key categories: Stocks Moving Up on Strong Volume%, Stocks Making New Highs, Stocks Breaking Out of Bases, etc. We believe these categories indicate strong future potential moves in the stocks. Our highest ranked stocks are shown in yellow in each of these categories. A stock that shows up in multiple categories should be looked at closely. Look at the chart patterns and the HI-EPSRS Reports of these stocks by clicking the links on the right. Does the chart show a basing pattern, or a cup shaped pattern, with the stock approaching or at a new 52 week high? A breakout from a tight chart pattern is what you want to look at. Reading chart patterns takes time and practice. Look at the charts of stocks that went up 50 - 100% within a 6 month period on our performance page. See if you can learn from these.

Hope that helps.

GSA

Q: I am brand new to your service.

My major concern about [other sources] and your service is that I continue to suffer from information overload. I feel paralyzed by too much information and feel incapable of deciding what info should help me make the decision of what to ultimately buy. For example, ANSI and BSTE are ranked stocks #21 and #22. Both have similar ratings with some differences that seem to speak to subtle pros and cons of each stock - one has better momentum (ANSI) while the other better A/D and is more undervalued (BTSE). How does one decide from here? Is there any science to the ultimate decision or is it a guess and a wish for good luck (aka a "crap shoot")? Please let me know. I am trying to be an earnest student of the market and your system - but feel forever frustrated! Am I untrainable?

A: Great questions. I just pulled up the charts and analysis of ANSI and BSTE in today's updated database. To me, the choice is obvious - ANSI. In fact, after being stopped out of ANSI, a week or so ago, we got back into this Top Pick today on the breakout to new high. The reason for ANSI over BSTE, all things assumed somewhat equal, is it's chart pattern. ANSI is breaking out of a long flat base, BSTE shows a wide and loose base structure. Also, we rely a lot on our final GSA Rank - ANSI is 75.09, BSTE is 73.45. The information overload that you speak of is all put together in our ranking of approximately 30 fundamental and technical factors.

In summary, after a stock meets our minimum ranking criteria, it is the chart pattern that is the ultimate deciding factor. On our Performance page, look at the chart patterns of our Top Stock Picks that gained as much as 50 - 100% within a 6 month period, and see if you can discern a common theme here. Almost all the charts have a sound basing pattern, either cup shaped, or flat, and the price is approaching or actually at a new 52 week high. It will take time to read the chart correctly, and even then we will all make mistakes. But you will greatly improve your stock picking skills by learning to buy at the right time.

Hope that helps.

GSA

Q: Where do I find predefined screens for CUP AND HANDLE patterns on your website??

A: The best way to search for CUP AND HANDLE patterns is to look at the predefined BASE BREAKOUTS or TRENDLINE BREAKOUTS screens. For the handful of results obtained, you should then view the chart pattern VISUALLY to see if there is a CUP AND HANDLE pattern that has formed. In our opinion, it is best not to try and create a screen for a pattern that is so subjective in nature. We would probably miss key stocks, if we did this with a strict screen. Best to narrow it down using the breakouts screens (since all Cup and Handles by definition have broken out) and then perform the important and mandatory visual check of the stock chart.

Hope that helps.

GSA

Q: Dear GSA
Thanks for trial. Question-On 7/27 your top pick was ****-last price 28.84. Stop loss 23.10. For this top pick would you try to buy at 28.84?(for your portfolio). Also, why is your stop loss more than the 10-12% less than 28.84? You suggest 10-12% stop loss.
Thanks,
B.

A: Hi,

We have placed an order to buy **** at the market tomorrow (Monday), which is our normal practice for Top Stock Picks posted over the weekend.

The stop-loss shown is an automatic calculation based on support and resistance points in the chart. To see how this works, click here. We often use the line to exit positions after we've had a run-up in the stock price, i.e., to take profits. However, for new positions, the 10-12% rule takes priority, irrespective of what the stop-loss line shows.

Best regards,

GSA

Q: Hello,
I was wondering if your site is mainly a research tool for investors, or if I could rely on your top stock picks and start my portfolio from there. I want to be told of the BEST prospects as they are developing early enough for me to confirm through my own research that it is a good pick and then still have time to buy in at the 5% range at breakout. I have a service now that sends me email daily with several stocks that are candidates and are reaching the breakout point. Do you offer something similar or would I have to use the database to find my own winners and go fom there. For an example, tell me what your database indicates for PORT (NASDAQ) for July 1, 2002. Would this be a buy, sell or wait under from your data? Thanks -RP

A: Hi,

Our site is as far away from a research tool as New York is from Honolulu. We use our site and our Top Stock Picks to manage our own portfolio. Our Breakout Stocks screen finds breakouts from basing periods ranging between 8 and 52 weeks. This is updated weekly using a fresh list of symbols we enter into the database. You may also be interested in our Daily Market Report which is emailed to you every hour, 2 hours, 4 hours or at the end of each trading day. This report contains categories like Stocks Moving Up on Strong Volume, Stocks Making New Highs, Breakout Stocks, and Timely High Ranked GSA Stocks. This report is generated only from the stocks in our database (around 300-350 in good markets), not from the entire market.

Ran a report on PORT right now. It has a B+ rank in our database. Only A rated stocks make our Top Stock Picks. We wouldn't buy it at these levels (liquidity is low, it seems overvalued by 67%, A/D is just barely a B). But it is in a Strong Group, Top Funds have been buying it, and it has a good steady uptrending chart pattern. Would hold it here if you're long. Our trailing Stop-Loss based on support and resistance levels is at $34.20.

Also we have a 2-Week Trial period for your benefit.

Best regards,

GSA

Q: Hi, I just finished touring your web site and it looks interesting. Unfortunately there are a lot of sites/services out there and a person could go broke subscribing to them all. I think it would be a good idea to offer a 2 week trial as long as people entered their credit card info and were serious shoppers. But that’s just me. Question: can you provide any referrals of people using your service now; I’m considering a 1 year subscription. I’m not the kind of person who’d ask for a refund but I would like an independent opinion vs. testimonials. On your web site I think it’s a little misleading to list 6 month highs because that’s assuming perfect/lucky sell points. Also I know you don’t give specific sell recommendations and date/prices but if after 8 weeks the stock was up 25%, your advice is to sell. Then if in the next 4 months it goes way up your record is distorted because you exited. What happens if your proprietary stop loss line gets hit? I assume you use it or you wouldn’t of developed and publish it. This too would make the 6 month high record artificially high. Since you manage your own money, I’d like to see: here’s where “we” recommended and bought the stock and here is where we sold it. Not trying to be nosy but if your buying your top stock picks as you say you are, half of the record is already out there. If you’d like, I can be reached by phone...9-5. Thx.

P.S. Did I say I’m from Missouri!

A: Thanks for all the good questions. Hope we can answer them:
1. We've debated offering a free period several times, but we also don't want to waste time with people who will abuse our services. Therefore, we offer a 2-week trial subscription. To sign-up, go to http://www.growthstockanalytics.com/subscrix.html.
2. We would like to send you referrals of people using our service now, but we've never done this is the past, and our privacy policy doesn't allow us to share their personal information. We have several subscribers who have stayed with us for multiple years. Since you can try our service for a short period, you will see the value for yourself.
3. If you ever want a refund, we will process it without any questions asked, for the UNUSED portion of your subscription.
4. On the performance table, we state very clearly in the paragraphs above that yes, nobody can sell exactly at the top. The table should be used as an indicator of the potential of our stock picks. Often, our sell signals - new highs on low volume, exhaustion gaps, etc, may get us out pretty close to the top. But you are correct, no one can time the top perfectly.
5. If the stock is up 25% in 8 weeks, our sell rule is to take profits at 30-35%. If the stock is up a lot (say 40% or so) in 8 weeks, then we want to hold for a longer period. In reality, this is an art, and cannot be easily boiled down to firm rules.
6. We use our proprietary sell rules to exit when we have a substantial profit. For new purchases, we exit at approx 10% loss.
7. Often on good "Top Stock Picks" we may try to trade in and out, trying to gain a point here and there. Often buy and hold maybe better. It would be time-consuming for us to try and post all our trades on the web-site. One comment, is that we've always bought our "Top Stock Picks" after posting on the site.
8. This is a tough market, but good stocks are out there.

Hope you decide to subscribe after your trial period.

Q: GSA, I am considering subscribing to your service and I have a few questions regarding your charts. There doesn't seem to be any timeline information on them. How is the X-axis represented? Is time in days, weeks, etc.? Is the time frame adjustable? Also, are the charts interactive? I don't understand the red trailing stop line. Can you explain what it is in more detail?

Thanks for your time.

A: Hi, The charts are weekly charts going back one year. Yes, there is no timeline on it, except for the date shown at the top right hand corner, e.g., 4/5 for week ending April 5. The time frame is not adjustable. Our service is not designed to provide sophisticated interactive charting functionality, but rather to provide you with a focused list of high EPS and Relative Strength stocks. We think we've included some of the more relevant information on our charts, e.g., GSA Rank, catalysts like Upside Gaps, Earnings Acceleration, Accum/Dist, Liquidity, etc. These should be sufficient to draw attention to the better performing issues.

The solid red-line on the chart is our proprietary stop-loss line, based on the stock's recent support and resistance levels. It adjusts when a stock breaks out above resistance, and also when it forms a basing pattern. You may be able to use it to time your exit. This graph may help explain how it works.

Hope that helps.

Q: Do your recommendations advise when to sell?
Thank you.

A: Selling is a personal decision and is up to you. However, for each Top Pick we have established a Sell Rule, shown on the site, which basically says to sell when you have a profit of approx 30-35% from the Pick price, unless the stock is a real winner and has moved up very quickly. In those cases, you may want to hold for a longer-term play. Each stock chart also shows a trailing stop-loss line, based on recent support levels. You could also use this to trigger a sell situation.

Hope that helps.

Q: Dear GSA, I'm wondering about the timing of top stock picks. I'm assuming that you select the "top stock picks" because the particular characteristics that you're looking for (earnings, volume spikes, etc, etc) are all correct at the point in time that you select them. But I'm wondering about top stock picks of a few months ago. Would you still consider them as "top stock picks". In looking at many of them, I see that there are certain characteristics that you now rate as "bad" as in passing through the stop limit price or being overvalued, etc. I guess the question is that if the particular characteristics of a past top pick once again lead you to believe it's a top pick, would you issue it again as a top pick, or put another way...when does it stop being a top pick?

A: I don't think there's an easy answer to this but I'll try. You are correct about the timing of our Top Stock Picks - we give more weight to the breakout volume, how far the stock is above its 200 day MA, and so a Top Pick will have a higher rank when the timing is "just right". Two scenarios could then play out:

1. The stock doesn't act right, breaks our stop levels, loses relative strength, is 10-12% lower than the price we paid, etc. We would probably see a fall-off in its GSA Rank, and wouldn't want to consider it again.

2. The stock moves up a few points, hopefully makes a new high, and then backs down. If the GSA Rank holds up, and the stock moves down to say a point or so above what we paid, it would still be a strong Top Pick for purchase.

So to answer your question, we normally do not issue a stock again as a Top Pick in the short term. It stops being a Pick if the factors in 1. above have happened. If several months have passed, it's a whole new story, and a stock could repeat itself as a Top Pick. In summary, it is best not to buy a previous pick just because the price may be lower than the price when the pick was posted, i.e., try not to average down. Within limits (5-10%), average up into a position. This way you will force feed your money into stocks moving in the right direction.

Hope that helps.

Q: What does the following comments under your Top Stock Picks mean?
ACLN LIMITED (ASW) $37.81
2001/08/06-PastPick
Target Price 30-35% from $36.7: $47.71-$49.55; No Profits Before 2001/9/28

A: We have established target prices based on the price at which the Top Pick was made. Our position (specially in today's market) is to take 30-35% profits when you have them, EXCEPT for the most powerful of stocks. Hence, do not take profits until 8 weeks have passed. At the 8 week point, if the stock has moved up, say 40% or more, we may be sitting on a real winner, and our Target Price message would change to "Longer Term Play".

Does that help?

P.S. Enjoyed the day today on ASW. Don't know if you bought or not?

Q: In your experience, what seems to be the best search parameters in order to search for "short opportunities" --it seems that there are always times good plays are hard to come by ....and there are a lot of "outside" parameters that interfere with a good run, but hardly nothing stops a hard down. They are a minor portion of my effort and recourses, but at times, especially last year, invaluable. Thanks

A: Short selling is difficult, but if done correctly, the gains can be swift and substantial. Your observation about hardly nothing stopping a down run is correct and very insightful. Two conditions that must be met for a good short:

a) Stock must be at least +150% above its 40 wk MA, e.g., if the MA is at $10, the stock price should be at least 1.5*$10 + $10 = $25. This can be searched for against our database.
b) Look for volume blow-offs, price gaps, or reversal days. Volume blow-offs happen on an extremely high volume day, e.g., the highest volume day since the start of the advance. The stock could also gap up in price. A reversal would happen if the stock closes at a price lower than the previous day on high volume. The best way is to look at a daily price and volume chart on our website.

Q: It seems I miss many pivot points. Of course, I clearly see them AFTER the fact! LOL. I reviewed your FAQ and spent quite a bit of time on your web page, but was uncertain how your service will help me avoid missing the critical BUY entry point. Thank you for any clarification you might offer.

PS. Further, why to you use 10-12% stop loss? Thanks.

A: You may want to run a search on our Sample Database for "Base Breakouts" or "Trendline Breakouts". Observe the chart patterns obtained, and see if these patterns help you catch the pivot point. You may find this useful in identifying where exactly the pivot point is. There is no substitute for looking at the charts, but this screen may reduce your effort substantially. Try it out.

I don't think a small 7-8% stop-loss works too well in the real world - we get stopped out too much. Hence we use 10-12%. The big winners, if you can ride them, will more than make up for the 10-12%

Q: I am interested in your service, however, I would like to know more about the people with whom I am doing business. Could you send me information about yourselves, your experience in the markets, etc.? Thanks in advance for your response

A: The people who started this business are individual investors who have a passion for the stock market. We have been investing in the market since 1990 or so. We have no outside affiliations with any other organizations, and use our HI-EPSRS database to manage our own portfolio.

We started Growth Stock Analytics in 1996 since we couldn't get all we needed from newspapers. Let us know what your experiences are and how you feel our service may help you.

Q: Dear Sir/Madam, I am a new member to your services. Can you mail me all the ratings for a stock. For example, I see the current GSA pick has been rated "A-". I would appreciate if you could explain what "A-" means and the list of all ratings. Thanks.

A: Our GSA ranking is based on a proprietary combination of fundamental and technical factors. Here is how the ranks map to the letters:

GSA Rank > 80 = A+
GSA Rank > 75 = A
GSA Rank > 70 = A-
GSA Rank > 65 = B+
GSA Rank > 60 = B-
GSA Rank < 60 = C

We buy only stocks ranked A-, A or A+ which means the rank is 70 or higher.

Q: I was just visiting your site. It's really interesting. I had one question. What is, in your opinion, the best stock that you ranked till now?? I am really curious. Can you please send me back an answer? Thank you.

A: Xeta Corp (XETA) on 8/30/99: Went up a max of 323% within 6 months.
Globespan Inc (GSPN) on 1/19/00: Went up a max of 306% within 6 months.