Page 164 - How to Make Money in Stocks Trilogy

78 A WINNING SYSTEM

Price 50 40 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 Volume 1,940,000 1,120,000 640,000 360,000 200,000 © 2009 Investor’s Business Daily, Inc.

Mar 1992

Dec 1991

S&P 500 p p Sep 1991
closes t closes e l ht c Volume up e lu 2/1 Jun 1991

e 0 e e erage line a Tight c Tight c T T T T V V p p Volume up u Mar 1991
d
Add: 8-week base and Add: 8-week baseand s bounce back above 10- b k week moving average line v g k g g g n V 2/1
a
n i w b week moving ave o m o e se p Dec 1990
Market t r correction c r 8 c u e on volume on volume l Add: recovers e c Add: above 1st pullback above 1st pullback p s v to 10-week moving k e 0 e average line li g r v a Buy: base-on-ba n s formed during g n d general market k m o c Volume up Volume up e
correction
correction
e
o
b
A
r
Earnings acceleration Earnings acceleration s Mar 1990 Dec 1989 Healthcare Compare increased 540% in 61 weeks.
n t Jun 1990

Sep 1989

Jun 1989

Mar 1989

Dec 1988 Sep 1988

Healthcare Compare–1990 Weekly Chart Jun 1988 Mar 1988 Dec 1987

Price = 20*eps 2.25 2.00 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