Page 1177 - How to Make Money in Stocks Trilogy

160 HOW TO MAKE MONEY IN STOCKS—GETTING STARTED

Chart-Reading 101: What’s the Trend?

This “story” is fairly obvious, but very important: Which direction is the
stock heading in right now?
There are basically just 3 possibilities.

Price
Stock showing strength and 42
moving in right direction
38
34
30
28
26
24
22
19
Positive Support: Stock 17 © 2013 Investor’s Business Daily, Inc.
staying above 10-week
moving average line. 15
14
Uptrend (Weekly Chart)

Price
34
30
28
26
24
22
19
17
Unclear if stock will begin to trend up or down.
Wait for strong heavy-volume uptrend to begin 15
before buying. © 2013 Investor’s Business Daily, Inc.

Sideways (Weekly Chart)
Price
30
28
26
24
22
19
17
Why buy when the stock is clearly 15
headed in the wrong direction?
You don’t know how much lower © 2013 Investor’s Business Daily, Inc.
it will go. Wait until it rebounds and
begins to trend clearly higher.
Downtrend (Weekly Chart)