Page 44 - How to Make Money in Stocks Trilogy

18 A WINNING SYSTEM

Price 160 140 120 100 80 70 60 50 40 34 30 26 22 19 16 14 12 10 8 7 6 Volume 30,000 14,000 6,000 2,000 © 2009 Investor’s Business Daily, Inc.
Depression begins, Depression begins n o e e stock falls from 98 f l l o to 29 in 5 weeks w 5 k week w 1 n n w e g g i i B io s 5/1 Dec 1929 Sep 1929

h
w
p
Market top Market top p t t k Mk M M Dow Jones Ind. Sell: climax top with Sell: climax top with o a l l excessive 5/1 split s Breaks below 10-week Breaks below 10 w b k r moving average and r a i m closes week below on closes week below on k w e o huge volume. Beginning m

8-week flat base e a at k tight closes e l l Dec 1928

y w ht h h
Buy B 8 8 8 ti t
6/5 Sep 1928
n k n h e - e e e o
Add: 3 tight weeks e ht w h 3 ti Add A after breakout and then n u k a pulls back to 10-week k p moving average line g a v g m Buy y B 22-week base k ba k w 22 Note: 3 weeks tight t w closes and tight price closes and tight price i n ut t spreads prior to b

The largest manufacturer of adding machines The largest manufacturer of adding machines a f g in the first half of the 20th century. In 1925, e t r they introduced the “Burroughs Portable” that they introduced the “Burroughs Portable” that g h r weighed less than twenty pounds. weighed less t
1
b
a

Burroughs Adding Machines–1926 Market correction n ti r t Mk M n n Earnings acceleration Earnings acceleration e n s begins s s beg Buy B n t e 44-week saucer-with-handle dl h ith h a k 44 4 Sep 1926 Jun 1926 Mar 1926 Dec 1925 Sep 1925

Price = 20*eps 8.00 Weekly Chart 7.50 7.00 6.50 6.00 5.50 5.00 4.50 4.00 3.50 3.00 2.50 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