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STRATEGY DEVELOPMENT TUTORIAL

The Teknalysis Strategy Development steps are as follows:

• Screen relevant stocks and indices
  
  The first stage is to decide the allocation of investment funds along the following: Large, Small ,  or Mid Cap, Industry specific, country specific.
  
  For instance large caps could be selected from Dow Jones 30, S&P 500, Russell 1000, NASDAQ 100, S&P 500 (See Market Indices Level 1 (those underlined) are specific Teknalysis indices.)  Large Cap Selections are in Level 1.
  
  Another expample might be second tier selections among the S&P 400 MIDCAP, and Russell 2000 SMALL CAP.   They  are part of Teknalysis index, Level 1 .
  
  Industry specific allocations could be easily determined by reviewing industry buy and sell correlation in the Teknalysis Level 2 indices -  STRATEGIC  ALLOCATIONS, ETF Sector series, Level 1 Indices, and  ULTRA  SECTOR  PROFUNDS
  
  Country specific allocation can be directed by viewing Teknalysis Level 2 - MSCI ishares Worldwide.
  
  Defensive posture - using equities to take advantage of stock market downtrends by buying Fixed Treasury iShares and Rydex mutual funds that sell short (see Level 2 - Strategic), ETF Trades- LONG and ETF Trades- SHORT
   
• Select and Vet
  
  Once a stock becomes a prospect for purchase or sale it should be reviewed in the Yahoo Lookup to verify the companies business profile, status,  its  relative industry strength and names of  the  majority shareholders.  
  In addition the following can be applied:
  
  IBD - CANSLIM criteria
  S&P rating
  Value Line rating (Be very leery of stock brokerage recommendations.)
  
  For mutual funds past performance - See IBD (Investment Business Daily)  Mutual fund ratings A to E based on a 3 year record and the current year to date, monthly and quarterly numerical percentages.
   
• Time purchases and sales 
  
  A stock with a solid business plan is affected by the following:
  
  Insider buying and selling
  
  Corporate stock purchases for treasury stock, 401K plan and other retirement plans.
  
  Merger and acquisitions
  a) acquiring firm stock usually falls.
  b) Firm stock being bought out usually rises.
  
  Institutional buying and selling bank trusts - Mutual funds
  
  Relative industry strength.
  
  The collective results of the above are  factored in the stock charts of Teknalysis - The law of supply and demand of any stock determine its direction.
  
   
• Utilize Teknalysis  
  
  The stock indices of Level 1 and Level 2 are labeled - Sell/Watch; Buy Alert; Buy/Hold; and Sell/Alert. For maximum results while minimizing downside risks, one should generally buy only when the stock is oversold and sell only when the stock is overbought.  The stock symbol is moved from column to column as follows:
   
  BUY ALERT - Stock symbol in black print is temporarily placed herein from the Sell/Watch column.  When it meets most buy indicators a new buy addition to the index will be added in blue print.  Once subsequently verified stocks are moved in green print to the bottom of the Buy/Hold column for the one day only.  If the stock is not subsequently verified as Buy/Hold its symbol is returned in red print for one day only to the top of the Sell/Watch column.
  
  BUY/HOLD - Stock symbols in this column come from the Buy/Alert column and placed at the bottom or from the unverified Sell/Alert column placed at the top.  The new entries to this column at the top or at the bottom are initially in green color.
  
  SELL/ALERT - Those stock symbols in the Buy/Hold category that meet most sell indicators are moved in black print to the Sell/Alert column.  New sell additions to this index are added in blue print to this column.  A subsequently verified sell symbol is moved temporarily in red print to the bottom of the Sell/Watch column.  A subsequent unverified sell symbol is moved in green print temporarily to the top of the Buy/Hold column.
  
  SELL/WATCH - Those symbols of the recently verified are held in this column for close monitoring as potential buy alerts. On a recent basis, those new sells are added at the bottom in red and those unverified buy alerts are returned in red print at the top.
  
  
  
• See also
  
  Timing Factors
  
  Tutorial on Level 1 - Advisory Information  
  
  Tutorial on Level 2 - Action Portfolios & Strategic Allocations 
  

Watching requires patience and no financial outlay. 

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