Page 67 - How to Make Money in Stocks Trilogy

30
A WINNING SYSTEM
Price
80
70
60
40
50
p
climax top
Dow Jones Ind.
t
Sell: clima
e l: clima
m
m
Buy D
D
c
c
u
n.
because the market is in a correction
on
n
n
c ion
leaders…so don’t get discouraged
w
corrections. These will be the new
handles are formed during market
handles are formed during market
and stop looking for winners just t
e
and stop looking for winners just
e
Remember 90% of all cup with
t
e
o
m
g
e
a
c
p
m
n
g
e
%
r
m
o
s
s
c
e
1957 bear market 34 m 30 26 22 Buy C y 19 16 Buy B y d: first pullback k a p p s Add dd 14 10-week moving g n o k e 0 o 1 to 1 12 e average line average line a av av v a 10 attern. tt weeks tight closes along bottom of pa f p o m tt bo g l e lo h
Maker of rocket motors m o and rocket fuel and rocket fuel c Market correction Market correction t k creates base creates base t Acceleration in earnings ning e A Buy A B B handle 53-week big cup-with-handle n with p week big cup al Yo Y Y Y Y v prior up p p p prior up e:
s
Thiokol Chemical–1957 Weekly Chart e growth rate growth rate t e 53 53 53 Note: big volu e: big g trend to the cup-with- t Volume dry-up at d Vo bottom of base of b ott btt Jun 1956 Mar 1956 Dec 1955
Price = 20*eps 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 0.25 0.23 0.20 0.18 0.16 0.15 0.14 0.13