Page 192 - How to Make Money in Stocks Trilogy

92 A WINNING SYSTEM

Price 165 135 115 92 72 62 46 36 27 23 19 16 13 11 9 7 6 4.6 3.6 3.1 140,000,000 80,000,000 40,000,000 20,000,000 © 2009 Investor’s Business Daily, Inc.

Bottom week has e m shakeout below bl b b o 98 low and June ’98 low and o 9 closes in upper u half of week’s k’ e f range, a good g n heavy volume heavy volume u u u v v Increased volume Increased volume v e without further r t progress down d

Sell: : Sell: S climax climax climax m m c c top top t Add Add Add A A A t hk k k June e J s hlf g sign on n i v v e o w pg g p Mar 1999
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General market t r e gh f follow-through u h th w 3 weeks tight and 2nd g g k e pullback in ascending n c b base like Redman m R k e Industries 1st quarter t t 1 i tr Idu must hold longe 1968, must hold longe o st m 1968 8 Buy u 14-week cup- e - with-handle h h
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Mar 1998
S&P 500 Dec 1997
Sep 1997

Jun 1997 Mar 1997 America Online increased 451% in 23 weeks.

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The Internet is still a young baby. The Internet is still a young baby b e T There will be follow-on leaders. o b T 4. Stock now hits a classic S u climax top and must be sold d m t e according to the rules. according to the rules t o y Rules were followed at every o e key stage of th

America Online–1998 Weekly Chart 1. Stock on breakout runs up over k k 1 20% in 1st 3 weeks, so rule is must k hold a full 8 weeks from buy point. hold a full 8 weeks from buy point k u 2. End of 8 weeks, stock is now s o up 30 to 52, or +73%, had its first 73% 7 52 30 to pullback from 4

Price = 20*eps 7.25 6.75 6.25 5.75 5.10 4.60 4.10 3.60 3.10 2.60 2.30 2.05 1.80 1.55 1.35 1.25 1.15 1.05 0.93 0.82 0.72 0.68 0.63 0.57 0.51 0.46 0.41 0.36 0.31 0.26 0.23 0.20 0.18 0.15 2/1