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Radvision Ltd (RVSN)
Makes a 
21% Move in 10 Weeks

Two stock charts appear below. The first chart shows how the stock looked when we sent it out as a Stock Alert buy recommendation on November 30th, 2005.  The second chart shows the resulting price move. The purpose of these charts is 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.  The float turnover box changes from day to day much like a moving average.  Imagine a stock's price that runs up and then goes sideways for one float turnover.  The idea here is that during the sideways move profit taking occurs as people who bought lower are selling their positions.  But if the new ownership that buys in the sideways correction hold their shares tight and the company continues to do well then any new demand will send the price of the shares higher.

Radvision Ltd (RVSN)
Breakout and Follow-Through Above A
Double Float Turnover Base of Support in a Rising Trend

On November 30th, 2005, I sent out a Stock Alert buy recommendation on RVSN.  Here's why.  Its fundamentals of strong revenue growth and strong earnings per share growth were excellent and it had recently come out with exceptional numbers.  In addition, it made a breakout above a sideways double float turnover base of support on strong volume and then followed-through again on strong volume.  The idea here is that during the long sideways move, the companies shares where being traded back and forth for more that one float turnover.  Uncertainty about the company's fundamentals causes some of the new ownership to sell their positions and the price moves sideways for an extended period of time.  When finally a large percentage of the float is held tightly new demand causes the price to breakout above the long sideways basing pattern and the price begins to move higher. Since the breakout and the follow-through are on very big volume this indicates that smart institutional money is taking large positions.

As you can see from the second chart below, my call was right on the money.  It moved up nicely and in the last 10 weeks has made a 21% gain.

Who says you can't time the market!

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