Page 1217 - How to Make Money in Stocks Trilogy

200 HOW TO MAKE MONEY IN STOCKS—GETTING STARTED

• Gap ups on heavy volume
Lululemon Athletica – 2011 Breakout Price 80
Daily Chart

70

Flat base
Earlier big-volume gap up 60
Gap Up in Base: Sign of Strength
Heavy-volume gap up shows big
investors accumulating more shares
© 2013 Investor’s Business Daily, Inc.
Lighter-volume down days Volume
shows selling not serious
1,600,000
800,000
400,000
200,000
5 19 3 17 31 14 28 11
November December January February
Lululemon Athletica increased 72% from February–July 2011.

• Positive reversals, and closes in the upper half of the range

Home Depot – 1991 Price
Weekly Chart
Breakout 50
46
42
38
34
30
28
26
24
22
Support: Price is down, but stock 19
closes in TOP half of range. Shows big Because stock closes in top half Institutional demand: Big
investors buying more shares in base. of range, these do not count as volume up weeks in right 17
weeks of distribution (selling) side of base 15
© 2013 Investor’s Business Daily, Inc.
Volume
1,600,000
800,000
400,000
200,000
Dec 89 Mar 90 Jun 90 Sep 90 Dec 90 Mar 91
Home Depot increased 275% from January 1991–January 1993.