Page 87 - How to Make Money in Stocks Trilogy

40
A WINNING SYSTEM
Price
140
100
120
60
30
70
50
80
40
26
34
19
22
16
12
14
e
e
See volume
u
v
e
correction
Buy
y
u
o
o
Market
Market
c
e
ec
a
co
S&P 500
7-week base-
t t t
straight up) and handle area does not
week base
s
v-shaped 2 weeks down and 2 weeks
o
s
k
up off low (straight down and then
on-base
e
Do Not Buy! Faulty base, narrow
w
Do Not Buy! Faulty base, narrow
w
k
h
s
d
d
7-we
7-we
d
b
r
y
Buy
y
y
y
y
w
B
n
7
o
7
7
r
a
drift down along its lows
dri ift down along its lows
w
s
w
o
dl
d h
w
s
)
ht
i
s
o
p
tr
Buy: pullback to Buy: pullback to c 10 10-week moving o average line 8 Huge volume after stock has h o t u v u 7 d shakeout below 38 low and n w 38 l bl e t o hk h day moving g pulls back to 200-day moving v d pulls back to 200 0 o b u
s
n
jet planes
New product: jet planes p ct od o p and new route to Japan and new route to Japan J w Market Market k correction o ec e e co u 0 v Add: pullbacks to a 10-week moving week moving m e average line g g g Sep 1963 Jun 1963
s
n
Ne
10
a
A
Mar 1963 Dec 1962
Do Not Buy! Stock is
Northwest Airlines–1962 Weekly Chart 1962 bear market 1962 bear market 1 Do Not Buy! Stock is B B extended straight up d d td from 8 to 14 and it s from 8 to 14 and it’s o a third stage base a third stage base t t Buy y u Huge volume demand e Volume up u Sep 1962 Jun 1962
ht u
t
i
t
Price = 20*eps 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 0.25 Mar 1962