Page 136 - How to Make Money in Stocks Trilogy

64 A WINNING SYSTEM

Price 34 30 26 22 19 16 14 12 10 8 7 6 4.5 3.8 3.2 2.8 2.4 2.0 1.7 1.5 1.3 Volume 640,000 420,000 280,000 180,000 © 2009 Investor’s Business Daily, Inc.
3 weeks tight tight closes p e 2/1

p 3 3 3 3 p p up p up p p Volume up lu V Jun 1983
y Buy 8-week cup 8-week cup e - Mar 1983
S&P 500 B
2/1
Dec 1982
p
k 6-week k e Volume up u m Sep 1982
h it i y Buy w 6 base b l Vo
Market has Market h k M o o t b b Buy Buy w u s
has s h follow-through o h day at buy point day at buy point t h 5/4 Jun 1982
d
d
% % . B y Buy 7-week cup with k w 5 tight weeks 5 tight weeks e t g 3/2 Mar 1982
n c stock has a h c y t t 7- t Dec 1981
Market correction o At breakout, stock has a s At breakout b Return on Equity of 37.2% qy q t 3 weeks tight g t closes Stock came public p during bear market Sep 1981

u
t
Mar 1981 Jun 1981 Dec 1980 Home Depot increased 892% in 64 weeks.
Only in America…two laid off workers w o e from another hardware store start a r e anced Home Depot. It ultimately advanced n ad ltimatel a It 100-fold in price by the year 2000. y the year 2000 0 y h fold in price by p p p Sep 1980 Jun 1980
s

Home Depot t

y
100
0
o
o
n
Dec 1979 Mar 1980 Sep 1979
Home Depot–1982 Weekly Chart Jun 1979 Mar 1979

Price = 20*eps 1.80 1.60 1.50 1.40 1.30 1.20 1.10 1.00 0.90 0.80 0.75 0.70 0.65 0.60 0.55 0.50 0.45 0.40 0.35 0.30 0.25 0.23 0.20 0.18 0.16 0.15 0.14 0.13 0.12 0.11 0.10 0.09 0.08 0.07 0.07 0.07 0.06