VOLUME 01: ISSUE 06 Dow Jones 9,232.97 -151.26 4:33 pm EST, Weds., October 17, 2001 NASDAQ 1,646.34. -75.73 For info, visit access.smallcapnetwork.com S & P 500 1,076.28 - 21.26 To be removed, please click here. Russell 2000   424.48  - 10.05   To SmallCap Network Members: SmallCap Network Members who DON'T trade, still may want to read through this special alert. You may want to check out today's SHORT-TERM TRADING ALERT issue, Chad Therapeutics from an investor's point of view. Before we get into some suggested trading parameters, it is important to cover some basics. First, we caution SmallCap Network Members that trading micro and small cap stocks is inherently risky. SmallCap Network Members are strongly urged to use limit orders when buying and selling thinly-traded micro and small cap stocks. Further, this is intended as neither an offer to buy nor a solicitation to sell securities. The information contained herein is intended for SmallCap Network Members capable of assuming the risks associated with short-term trading. The SmallCap Network has received NO COMPENSATION for publishing the following trading alert and Members should consider doing further due diligence on this Company. Chad Therapeutics (AMEX: CTU) appears to be an excellent micro cap trading opportunity. CTU has experienced excellent performance since closing at $1.00 on May 7, 2001. The stock currently has a relative strength rating of 96, meaning it has outperformed 96% of all other issues over the last 13 weeks. Since hitting an intra-day high of $3.70 on September 17, CTU has pulled back to the $3.00-$3.23 area over the past few sessions while volume has diminished. Yesterday, the shares didn't trade and in today's weak market action, CTU traded down x on x,xxx shares. The chart below provides a graphic representation of the recent uptrend in trading action of CTU shares over the past few months. The lower red line represents this uptrend while the upper red line represents the recent "wedge" formation created by the issue's most recent pullback.  In addition, CTU is in the Medical Equipment and Supplies group. Over the past 13 weeks, this group has been the seventh best performing group in the market, appreciating 5.38%. In comparison to the broad market (as measured by the S&P 500,) the group has outperformed by 16.47% over the same time frame. CTU's 13-day EMA is $3.09 and the 50-day EMA is 2.97. In our experience, when a top-performing stock in a top-performing group pulls back to this range, it provides an excellent trading opportunity for speculative investors. With these factors in mind, here are suggested trading parameters for those SmallCap Network Members interested in trading CTU shares:                           PRICE TARGET:                $ 4.07                           BUY LIMIT:                        $ 3.18                           STOP LIMIT:                      $ 2.88 OR 8% below cost basis per share                           EST.  TIME FRAME:           30-45 days The SmallCap Digest strongly suggests $2.88 as the downside price barometer and loss limit for this trade. Should the stock trade or close at $2.88 or lower, CTU shares should be sold no later than the next day's opening.  This would represent a close well below the current 50-day EMA and we would abandon this trade quickly. It's still a bear market until proven otherwise, so we'll play this trade close to the vest. Positioning CTU shares in the $3.05-$3.10 range will limit the downside risk in the trade to about 8%. If we've called it right, and CTU hits our trading target of $4.07 over the next 30-45 days, the POTENTIAL return on this trade would be about 32%, an acceptable 4-1 upside/downside wager.On a fundamental note, our immediate take is that Chad Therapeutics has undergone a nice recovery in its business and has turned its first profit since second quarter June 1998. Sales have risen nicely and new products appear ready to emerge from their pipeline. Investors are encouraged to explore more about CTUvia the quote link above. To update, change, or add a new email address please click here.     D I S C L A I M E R : The SmallCap Digest is an independent electronic publication committed to providing our readers with factual information on selected  publicly traded companies. SmallCap Digest is not a registered investment advisor or broker-dealer. 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