This screen is one of my favorites, which I shared with folks 
more than 3 years ago in 2001. The premise behind this screen 
was to try and find cheap stocks (stocks at or less than $15) 
that were trading at (or consolidating) just under their 52 week 
high, in an effort to get on board before they broke-out to 
new highs.

In other words, I wanted the stocks to be near their highs, but 
most of all, I was looking for stocks that had been turned back
from their recent highs, had consolidated their advances on 
their trek higher to those highs and were just now starting to 
make a run at the 52 week high again. Im a big fan of getting 
into basing patterns (relatively narrow trading bands) after an 
uptrend has been established. Especially near recent price highs,
since stocks making new highs tend to make even higher highs.

I have found this screen to be an ideal strategy for finding low
priced stocks with a high probability of success.

Parameters:

- It searches for stocks trading at or below $15. 

- They also have to have a Zacks Rank of 1.
 
- They have to be trading within 10% of the 52 Week high.
  (Expressed as Current Price / 52 Week High >= .90) (Simply put,
 Im looking for stocks high up in their uptrend.)

- The % Price Change over the last 4 weeks has to be >= 10% but 
not more than 20%. (Im looking for stocks on the move, but not
ones that have moved so much, so quickly, a correction could be 
in store. Since 10% seems to get peoples attention while follow-
thru at 20%, typically signals the beginning of a trend or a
breakout, I wanted to be alerted BEFORE a breakout was seen.

- And lastly, for good measure, I want the Beta to be <= 2. 
(Active stocks are good, but wildly volatile ones are not.)

Results:

I ran a series of tests over the last 3 1/2 year time span (2001,
2002, 2003, and the first half of 2004) as well as a series of
tests for each of the last three and a half years individually. 
I rebalanced the portfolio every four weeks and started each run
on a different start date so each test would be rebalanced over 
a different set of four-week periods. (This was done to 
eliminate coincidence and verify robustness.)

Over the last 3 1/2 years, this strategy has shown an average 
annualized gross return of 75.8% with an average win ratio 
(winning periods divided by the total number of periods) of 75%.
And it holds on average of only 3-5 stocks in your portfolio 
each month. 

In 2001, the average annualized gross return was 53.5%, with an 
average win ratio of 71%. (This years avg. # of stocks held per
period was 8.)

In 2002, the average annualized gross return was 36.2%, with an 
average win ratio of 70%. (4 stocks / avg. per period.) 

In 2003, the average annualized gross return was 167.2%, with 
an average win ratio of 87%! (3-5 stocks on average.)

And so far, 2004s YTD (thru 7/16/2004) cumulative average gross
returns are up 25.1%, (annualized to 68.8% for 12 months) with 
an average of 3 stocks per run. (The cumulative average returns
for the S&P are 0.2% (annualized to 0.4%).

As of Tues., 9/7/04, only two stocks had qualified. They are:

TWTI    Third Wave Technologies, Inc.   
WLV     Wolverine Tube, Inc.

Note: Even though this screen will generally produce on average 
of 3-5 stocks per period, there will be times where literally no
stocks will qualify due to the narrowness of the parameters. 

Tip: Since this screen has such a great track record and such a 
high success rate, if nothing comes through on my first pass, 
Ill run it day after day, until the screen spots something.

(This is one of the reasons why I run so many backtests using 
different start dates in my analysis. I want to make sure that 
the strategy has a history of picking good stocks at any time.)

Want to know what it picks next week? Then sign up for your free 
trial to the Research Wizard stock picking software now.
http://at.zacks.com/?id=1388 


All the Screen of the Week strategies are created and backtested 
using the Research Wizard software from Zacks Investment 
Research. Learn more about the Research Wizard and Free Trial
offer at http://at.zacks.com/?id=1388