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America’s Greatest Stock-Picking Secrets 75

Price 36 27 23 19 16 13 11 9 7 6 4.6 3.6 2.9 2.5 2.1 1.8 1.5 1.3 1.0 0.8 Volume 1,660,000 980,000 580,000 340,000 200,000 © 2009 Investor’s Business Daily, Inc.
e s s must Mar 1992

p stock have more v h ks and shakeouts cks and shakeouts a d h handle. Therefore, must e Therefore f p o h o t 2/1
S&P 500 Sell: climax top x m o s Hi-tech s e H a pullback pullback ullback pullba g b making them harder to e makin mak k k m m h handle d h really know company w y r well to sit through the well to sit through the t w numerous tests. numerous tests o m n Dec 1991 Sep 1

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Jun 1991
s
Pullbacks l Mar 1991
Buy u c
Dec 1990
3/1
d
e Big volume demand Jun 1990
m Sep 1990
d
g e
Buy uy Mar 1990
e B 4 weeks tight closes 4 weeks tight closes o Big volume clue Big volume clue m Dec 1989 American Power Conversion increased 745% in 96 weeks.
Note: angle of earnings line a a on log chart accelerated in on log chart accelerated in e rate of change k 5/4 Sep 1989

Mar 1989 Jun 1989 Dec 1988
up:
American Power Conversion–1990 Fundamentals were great before stock made its huge run-up: Fundamentals were great before stock made its huge run f e 3 years of annual earnings nearly doubling each year o s a 100% Annual sales growth up over 100% v th o l Pre-tax margins at 26.9% s t5
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Price = 20*eps Weekly Chart 1.80 1.45 1.35 1.25 1.15 1.05 0.97 0.88 0.78 e 0.68 0.63 r 0.57 l a A 0.51 a 0.46 n t R 0.41 0.36 0.31 0.26 0.23 0.20 0.18 0.15 0.14 0.13 0.11 0.11 0.10 0.09 0.08 0.07