Take a look at a 1-Year, Daily graph of M&F Worldwide, MFW. As I write this essay, it's up about $7.00 and I own it. How did I find this guy?

It all goes back to an essay I wrote last December, December 22nd to be exact. In that essay I wrote about my ambition to find "a way to find really big winners when they are still in the early stages of development." I discussed some of the ideas I was testing and admitted that I wasn't satisfied with what I had done. So, with tongue in cheek, I asked Santa to help me out. Sure enough, he came to the rescue. Let's take a look at what he taught me. (I suggest you print this essay so that you can see better what I'm going to illustrate.)

Let's take a closer look at the 1-Year Daily graph of MFW. What are the clues that would tell us that MFW could be a really big winner? Note that the Price of MFW was flat-lining until it spiked higher on 05/08/06. Did it hit a new 52-weeek high? The 2-Year Daily graph shows that it did not. In fact it would not hit a new 52-week high until 12/13/06. But it wasn't an explosive new high. We got an explosive new high a week later, on 12/20/06. How do I know it was an explosive new high? The answer should be obvious. Price soared and RT exploded. Even more importantly, however, Volume soared to 408,200 shares traded, more than five times the average AvgVol of 69,500. So there you have the major clues: A 52-week high, high volume and a break-out from a channel.

So I wrote a search called "High CI Prospects." It looks for stocks hitting a new 52-week high in the weekly mode, Stock Percent Volume Change >= 200, and Stock Price - (Split Adjusted), Channel, 26 week 50% Channel, no break-out starting 1-week ago, sorted by VST Desc. After a little testing, I added Stock AvgVol > 20,000. Let's see if it finds MFW on 12/20/06. To do this, click on UniSearch, Strategies - Price-Volume and High CI Prospects. Set the search date to 12/20/06 and click on Run Search. Bingo. It's right there at the top of the list. That's great, but it doesn't always happen that way. So this is where the cherry picking comes into play.

I do my cherry picking by looking at the graphs of all the stocks the search finds. As you know, I like stocks with smooth chart patterns. MFW is a good example of what I like. I quickly reject stocks with helter-skelter, volatile chart patterns. To see what I mean, run the High CI Prospects search as of 05/25/06. It finds seven stocks. Look at the 2-Year Daily graph of each stock. The ones to reject should be easy to spot and the big winner will jump out at you. To learn more about picking the best candidate stocks, visit the VectorVest University to see this week's "Strategy of the Week." Mr. Gordon White will explain in detail exactly how to identify the stocks with the best chance of becoming really big winners.

Ideally, one should run the search every day, but even I don't do that. I run the search just once a week, but I run it for every day for that week and put the stocks for each day in a WatchList. Then I look at the graphs of the top 50 or so stocks in the WatchList ranked by VST Desc. I create a new WatchList every month. Actually, I went back and created WatchLists for several past months. In this process, another big winner this search found was Jones Soda, JSDA, at $12.11 on 12/22/06. Run the search on 12/22/06 and see for yourself.

One last point I want to make is that you don't need to wait for a strong market to find big winners. It can be done anytime, whether the market is going up or down. In other words, it's always open season for Cherry Picking for Big Winners.

SPECIAL NOTE: If you do not have the ProTrader add-on module, please click here or call 1-888-658-7638 to get a free trial.

P.S. MFW closed the day up $11.58.

THE SYSTEM WORKED.
It took me about five minutes to fill out my bracket sheet for the NCAA March Madness office pool and I won. There was no guess work in picking the teams I wanted and it was all explained in my essay of March 19, 2004 called "Work the System."

ETF WATCHLISTS.
All manner of ETF's are being created at a blistering pace and they can be classified and categorized eighty ways to Sunday. We haven't succeeded in doing that yet, but we have created a new WatchList Group called "ETFs" and compiled a WatchList for each ETF provider. Hopefully, this may be of some help to you.