Ask Colin

You filter stocks in consolidation with PE ratios below 10. But won't all stocks that have fallen have low PE ratios?

You have this the wrong way around. I do not filter stocks in consolidations. I filter all industrial stocks looking for those in consolidations (growth stocks), but mainly in accumulation zones (value stocks).

So, after I have filtered out the low PE stocks, I use the charts to find those stocks with the chart patterns of the two models.

It is true that almost all stocks that have fallen 50% or more will have low PE ratios, though there are exceptions. Most of the stocks with low PE ratios will be in trouble and not interesting to us now. That is the point of filtering the PE scan with the charts.

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