Charts Help You Skirt Scam Slams.(THE SMART INVESTOR)(WINNING WAYS)

Byline: KEN HOOVER

After Enron, investors are nervous about how their companies keep the books. Are the earnings they announce real?

For most investors, it's impossible to tell. Even top money managers and analysts get duped sometimes. But skillful chart reading can help keep you out of trouble. The three charts at the right show stocks that turned out to be scams. In each case, the skilled chartist was out of harm's way before the bad news hit.

Centennial Technologies had already advanced fivefold in two years when it broke out of a 13-week cup-with-handle base May 24, 1996 (not shown in graph). The company made sound cards and other tools for PCs -- supposedly.

Its Earnings Per Share Rating was 98. Its Relative Price Strength Rating was a bit low at 74. The stock moved nicely during the summer.

At the end of that November, the stock split 2-for-1, its second split. The stock ran up 61% in the next four weeks 1. A climax run on a stock split is a sure sell signal.

On Dec. 9, IBD ran a New America piece on the company, quoting CEO Emanuel Pinez. At the absolute high, Dec. 30, the stock gapped up, then retraced most of its gain 2.