Augmented Buy B24s Are Powerful
                                                                 7/17/2009

      From 1990 to 2006, the average gain for each year with these augmented Buy B24
      stocks is +36.2%.  Others have studied these results and report that if one were
      to sell those that drop more than 10% from their purchase price, the returns jump
      to nearly 60%.  I have not tried to verify this.   This chapter lets us look at these
      signals in the light of the TigerSoft tools used now in 2009.

      The full original study can be seen at
                 http://www.tigersoft.com/Augented-BuyB24s/index.html
      In the study, we simply assume that a stock is held 12 months.


      First, here is the basic TigerSoft chart we use now.

      Sample 2009 TigerSoft Chart.   Note that the right side of the charts are unavoidably
      cut off.


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             Augmented Buy B24s

       Back at the beginning of 2007, TigerSoft refined its Buy B24.  The original Buy B24
       appears on TigerSoft charts when a new high is made after the current Tiger Accum-
       ulation Index ("IP21") has reached +.5.  By adding additional qualifications, the
       Buy B24 becomes rarer, of course, but also more powerful.   Each additional require-
       ment brought better average gains for all its occurrences for the entire period of
       1990-2006.  A holding period of one year was used to reckon the gains.  The TC-2000
       data base was used.  Understand that it is very likely that this testing considerably
       under-estimated the gains, since a certain number of the Augmented B24 stocks were
       bought out, and the TC-2000 data base dropped the data for a company that no longer
       exists independently.

       After all the testing, the optimal conditions were determined to be:

       1.         The stock first needs to make a 3-month high.
       2.        The earlier Accumulation bulge (IP21) must reach +.60
                  That period of intense insider buying may occur up to 7 months before
                   the 3 month price high, or it may appear concurrently with the new price high.
       3.        The "AI/200" must be between 150 and 200 at time of signal. 
                   AI/200 is a count of the number of days that the Accumulation Index is
                   is in positive territory over the last 200 days.
       4.        ITRS must be in range .0585 -.80 at time of the signal.   
                  ITRS measures relative strength by subtracting the DJIA's 50-day percent
                  change from the stock's. 
       5.        The current Accumulation Index (IP21) must be above .37 unless it is above .35
                  and ITRS>.33
       6.        OBV must confirm the high by making a new yearly high.
       7.        Trading volume must be at least 1200 shares a day but no more than 1,800,000
       8.         If there has been a Buy B24 in the previous 12 months, a new B24 can not
                   be considered augmented.

      It would probably help to require the Closing Power also be making a new high
      for the augmented B24.  New software will be written to use these 9 characteristics.

      Several other aspects of the augmented Buy B24 should be mentioned. 

      1.        Sometimes a new high that produces a regular Buy B24 soon thereafter
                 shows a current Accumulation Index well above +.35.   As now written, Tiger's
                 automatic signals only show the first B24.  The later "augmentation" is not
                 indicated automatically, though the levels of the Accumulation Index show
                 on the chart and the exact value of IP21 for any day can be obtained with the
                 "vertical line" command.   

     2.        Another important element is the number of bulges of intense Accumulation
                on a one-year chart.  While one bulge past +.60 is sufficient to set the stage
                for an augmented Buy B24, more such bulges make the stock that much more
                bullish, both as an extra vote of confidence from insiders and because more
                of the float of the stock becomes tightly held.

   3.          Thirdly, extraordinarily high volume makes a new B24 more bullish.  Volume
                is needed to move prices.  A very big jump shows exceptional demand for the
                stocks.  This may be occasioned by a news story, or it may not be.  When there
                is no news, it is more certainly a sign of insider and informed professional buying.  
                TigerSoft changes the color of the charts from black to red when volume is
                unusually high.

   4.         Price gaps accompanying a Buy B24 add bullishness to the picture.

    5.         Some new highs are more bullish than others.  Breakouts past 3x or 4x
                tested flat resistance are more bullish than simply just another new 12 month
                high.  Breakouts past well-tested longer term resistance, as seen in 5-year
                charts are more bullish.    

                 DDRX shows these concepts.

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         Before continuing, I want to stress that Buy B12s often precede an augmented
     Buy B24. There is nothing said here that should keep you from buying on a major
     Buy B12, especially when the overall market is strong and the stock is also breaking out
     to a 12 month high on unusual (red) volume.   In addition, nested major Buys are also very
     important Buys for Tiger users.
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       We do not need to wait for a 12 month high to buy an explosive super stock.
       Rounding bottoms are common among stocks that are not actively traded.  The
       combination of a Buy B12/augmented B24 works especially well in a strong
       market (steeply rising A/D Line) when prices are substantially below the 12 month
       high.   Try to pick stocks that have considerable headroom, that is they are way
       below their 12 month high.   And instead of automatically taking profits at the old
       highs, if the internals are good, give the stock a chance to score a Buy B10
       breakout to a new high.  That re-establishes the upturned. 
SABA.BMP (1118454 bytes)

      Another caveat.  Though we would prefer to buy stocks showing AI/200 scores higher
      than 140, everything has to be considered.  In the case of SMART below, big buyers
      were clearly waiting for the stock to get back above its blue 50-day ma to buy.  As soon
      as the overall market gloom lifted the stock advanced above the 50-DMA and the insider
      buying started.  The bulge of Accumulation above +.50 shows this.  And such buying is
      very bullish when followed by strong upwards price action by the stock.  Clearly insiders
      were buying and were not eager to take profits.  Such an interpretation is born out by
      Yahoo's statistics on insider buying in SMRT.  There are no insider sales in this period
      and lots of buying of 100,000 shares are more. 

                             See http://finance.yahoo.com/q/it?s=SMRT

22-Jan-08 STEIN JAY
Officer
111,400 Direct Automatic Purchase at $4.15 - $4.3 per share. $471,0002
17-Jan-08 STEIN JAY
Officer
237,100 Direct Purchase at $4.23 - $4.3 per share. $1,011,0002
16-Jan-08 STEIN JAY
Officer
240,000 Direct Purchase at $4.18 - $4.28 per share. $1,015,0002
16-Jan-08 STEIN JAY
Officer
60,000 Direct Purchase at $3.83 - $4.17 per share. $240,0002
15-Jan-08 STEIN JAY
Officer
100,000 Direct Purchase at $3.75 - $3.89 per share. $382,0002
14-Jan-08 STEIN JAY
Officer
135,500 Direct Purchase at $3.60 - $3.98 per share.
11-Jan-08 STEIN JAY
Officer
500,000 Indirect Acquisition (Non Open Market) at $0 per share. N/A
11-Jan-08 STEIN JAY
Officer
1,000,000 Indirect Disposition (Non Open Market) at $0 per share. N/A

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                                             AUGMENTED B24s ARE POWERFUL

             The average gain for each year with these stocks is +36.2%.  Others have
             studied these results and report that if one were to sell those that drop more than 10%
             from their purchase price, the returns jump to nearly 60%.  I have not tried to verify this.

             The full study can be seen at http://www.tigersoft.com/Augented-BuyB24s/index.html
             In this study, we simply assume that a stock is held 12 months.
                      

Year                   Avg.Gain      Winning Trades   Losing Trades    Gains>100%   Losses<-30%

1990             + 44.7%                3                      1                         1                    1
1991             + 29.6%              10                      4                         2                    1
1992              +56.6%                 9                      4                         2                    0   also a +91.8% gain
1993              +14.0%              11                       9                         3                    1
1994              +10.0%                5                      4                         1                    1
1995              +37.5%              12                      4                         2                    2
1996               +34.2%             13                       7                         2                    0    also a +93.8% gain
1997                + 7.3%             11                       8                         0                    3     also a 91.9% and 87.3% gains
1998               -13.6%                1                       6                         0                    1
1999              +175.6%              1                       1                         1                    0
2000                 +40.4%             4                       2                         1                    1
2001                  + 1.0%           10                     10                          0                    2
2002                  +19.0%          10                       6                         2                    3
2003                  +58.4%          38                       6                          9                    2 also 3 over +80% 
2004                 +40.9%           18                       7                          3                    2
2005                  +23.9%          26                      7                          2                    1
2006                  +27.2%          
-----------------------------------------------------------------------------------------------------------
                         +36.2%           182                     86                        31                    21
Also
2007      incomplete but there were a number of stocks that did very well.
2008      The super stocks in this year were the penny oil stocks until the bubble burst.
2009      Many, many low-priced stocks qualified here and did superbly.

          If there has previously been a Buy B24 (augmented or not in the prior year),
          a new Buy B24 cannot be considered augmented.  The earlier B24 signifies that
          insiders have already taken substantial positions.   As a result, the stock may
          already have seen its price ripen to the point where they may take profits long
          before the point where a year has passed since the latest B24.  See the charts
          of GHM to show this.  April and June saw regular B24s in the chart of GHM
          below.   The second GHM chart displays a  November Buy B24 that could
          not override the bearish weakness in the declining (blue) Closing Power.

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BUY
                                                                                                                                    
                                                                                                                                          
SELL
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       The average gain of +36.2% is so high because of a small number of stocks that
       rose hundreds of percent.  The conclusion one might draw from this is to buy and
       hold a handful of such stocks for a year.   I think that is no longer a desirable
       conclusion.  That worked well in the go-go years of hyper-speculation in the late
       1990s and between 2003 and 2007.  But, it is too risky now. 

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    The collapse of low priced energy stocks in 2008 show that one must be prepared
    to sell earlier than simply holding for one year.  Using the 50-day ma as a place to use
    a closing stop loss is still the best single approach.  Adding the requirement that the
    Accumulation index either be negative or the Closing Power be below its 21-day ma
    when the stock closes below the 21-day ma is the basic recommendation here. You
    can see how helpful this was in the second chart below - in the case of GTE.  Note that
    here we are taking profits on a penetration of the 50-day ma even when the Accumulation
   Index is still positive if the Closing Power is weakening very significantly. 

    The first chart shows a case of a new high made with the older Buy B24.  The stock
    makes a new high after a bulge of the Accumulation Index above .50, but not .60.  In
    addition, the current Accumulation ("IP21") was only .203, not above .35, as required
    by the augmented Buy B24.          

       

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                                                                    Buy @ 2.14
         See - Tiger Blog "King Coal's Super Stocks. TigerSoft's Charts Spotted Them Early-On."
                                   
http://www.tigersoftware.com/TigerBlogs/6-3-2008/index.html

    Before GTE turned down, the blue Closing Power became very weak.    The stock's
    move past 8 to a new high was widely unconfirmed by the blue Closing Power
. This
    signified that professional selling was already widely outweighing professional buying. 
    In this condition, when the stock closed below its 50-day ma, Tiger users should have
     take profits.  


                                                                               Sell @ 5.87
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     After an augmented Buy B24, expect the stock to rise steadily.  The data from
     1990 to 2006 shows that biggest gains often come between the 6th and the 12th
     month after the first augmented Buy B24.  But we do not want to be bound by such
     expectations.  In FPP (below),   the stock leapt 300% in a month.  I'm pretty sure
     taking profits after a 300% gain in a month would test well.  If you did not sell,
     see how the next rally saw the Accumulation Index drop into negative territory. 
     Seeing that, one might well have decided to take profits.

    I can't show what happened to FPP below at this point because it has stopped
     trading, but we can guess it sold off badly with most other stocks in the second
     half of 2008.      



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     Stocks under $2.00 a share behave similarly to higher priced stocks.  And they
     offer a trader with limited funds an excellent way to learn proper trading techniques.
     There is one important difference.  Many very low-priced stocks go to sleep for
     long periods.  Using TigerSoft signals and indicators will let you avoid getting caught
     in most, but not all of these stocks' periods of dormancy.  TigerSoft's Power Ranker
     easily lets you spot stocks coming alive with particular buy signals and other key
     characteristics, like prices making a 12 month high or unusual volume.. 


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                                                                                                     BUY @ 0.16

       When the stock drops below its 50-day ma with a swooning (blue) Closing Power
       and a negative Accumulation Index, it is time to take profits.
 
             
                                                      SELL @ 0.41

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               Below are some more cases of augmented Buy B24s. .

                          --------------------------------    2008 ------------------------

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                           --------------------------------    2009 ------------------------
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        See how Closing Power made a new high ahead of prices.  This is typical
        in an "explosive super stock".  It is not in itself a reason to Buy.  But it
        does enhance the attractiveness of a stock under consideration.

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     You will often find that augmented Buy B24s are thinly traded stocks.  Buying these
     carefully in smaller amounts.  Also consider buying them at the opening when their
     Closing Power is very strong. 

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