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Denbury Resources (DNR)
Makes a 
32% Move in 13 Weeks

Two stock charts and Two Graphics appear below. The first chart shows how the stock looked when we sent it out as a Stock Alert buy recommendation on the morning of October 31st, 2005.  The second chart shows the resulting price move of 32% in 13 weeks and still counting.  The purpose of these charts and graphics are to demonstrate the principles of Float Analysis and the power of Float Charts. 

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Float Turnover Theory (The Basics) - When a company comes public it issues shares outstanding.  The management always holds some percentage of these shares.  What's left over and is sold to the public, is called the float or floating supply.  Float Charts are all about tracking the floating supply in an attempt to see where the smart money is buying and selling. The gray rectangle on a Float Chart is known as a Float Turnover.  It shows the least amount of time it takes for the entire float to change hands once.  The total amount of shares traded during the float turnover equals the floating supply.  We simply add up the number of shares that traded over a given time frame until it equals a stock's publicly accessible float number.   Imagine a stock's price that goes sideways for one float turnover (like the stock below)  The idea here is that during the sideways move new ownership has bought the float hoping that the price will move higher.  Once the float is accumulated and held tight, any new demand drives the price upward.

Denbury Resources (DNR)
ABC Set-Up LONG
Overhead Support Formation

In October 2005 DNR returned to the same $20 price level that it had first reached 18 weeks earlier in July. During the week of October 21st, 2005, its price came right down to within pennies of its lower float channel line.  This implied at least two major possibilities.  Either the ownership in the float turnover above the October 21st price had bought at exactly the wrong time and their losing positions would only get worse or the ownership above the October 21st price would  hold their shares tightly and the price would rise up and away.  During the week of October 28th, the price turned higher with a very bullish move to the upside.  This was an early signal that the accumulation phase was over and a price rise was about to occur. On the morning of October 31st, we sent out a stock alert buy recommendation for DBR.  Snce then it has made a 32% move in 13 weeks.

Who says you can't time the market!

Study the Charts and the Graphics below it.  They'll help you understand the principles of Float Analysis and the power of Float Charts.

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