Page 68 - How to Make Money in Stocks Trilogy
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30 A WINNING SYSTEM
Price 80 70 60 50 40 34 30 26 22 19 16 14 12 10 8 7 6 4.5 3.8 3.2 2.8 Volume 150,000 80,000 40,000 20,000 © 2009 Investor’s Business Daily, Inc.
Mar 1960
attern. tt f p o m Iron’s n C of of at the bottom m t b e the e h 1 e in n s d g’s ’ illin Di D d ould h u y e ture u e Dec 1959 Sep 1959
d: first pullback k a p p s 10-week moving g n o k e e average line average line weeks tight closes along bottom of pa tt bo g l e w that at bottom of Tennessee Coal & s e e o up in October 1898 (page 11), at the bottom t 1 g S.S. Kresge’s cup in June 1922
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Dow Jones Ind. climax top t e l: clima Sell: clima m m c c Buy D D Add dd 0 o 1 to 1 a av av v a lo ht t ti t k k m t t October 1898 (page 11) 9 ’ r s o 17) ) a p 5 1 s learn to recognize this accumulation in the fut s t g ) u want to win) ) w w Mar 1959
n. n n c ion on o u Note: 3 we we 3 w Nt o a w You saw s o b c cup in O up in O upinO n u cu Kresge sc s K SS S S S f o h 1925 ( 9 h Ma u n u o re a (if you want to win). a a u (if you Volume up p u m l Dec 1958 Sep 1958
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Remember 90% of all cup with p % m handles are formed during market handles are formed during market g m e corrections. These will be the new e c leaders…so don’t get discouraged c n s and stop looking for winners just and stop looking for winners just t e g o because the market is in a cor
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1957 bear market m Buy B y l V You always want a ant a s s a e volume increase on the volume increase on the t c buy week breaking out g o b Dec 1957 Sep 1957 Thiokol Chemical increased 860% in 109 weeks.
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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:
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
