Page 89 - How to Make Money in Stocks Trilogy

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150,000
350,000
30,000
Volume
70,000
Price
140
120
100
260
300
340
220
190
160
15
17
60
45
24
13
38
20
80
70
Sep 1966
Jun 1966
Mar 1966
S&P 500
Dec 1965
Sep 1965
Jun 1965
er
de
de
st t
and loose to safely buy on the attempted breakout 9 weeks late
e
normal handles correct only 8–12%, which makes this too wid
d
12%, which makes this too wid
Stock just corrected 32 to 26, almost 20% in handle area. Mos
s
M
s
o
Mar 1965
t
e
e
h
Xerox increased 660% in 168 weeks.
st
st
ne and whole base is tight holding almos
and whole base is tight holding almos
dl
e
pullback to 10-week moving average
n
u
e
a
m
red week huge volume but gives up small amount, 3rd week up big on huge volume
3rd week up big on huge volume
h
Huge volume support: 1st red week closes in upper half of week’s price range, 2nd
Dec 1964
all of its gain since advancing 100%
all of its gain since advancing 100%
t 20% i
e
v
o
n
e
w
2
Sep 1964
l
a
8
normal handles correct only 8
s
a
-
b
6
26
e
Jun 1964
d 32 t
Add: pullback to 10-week
w
d
b
w
r
w
g
g
l
pull
1962
in December 1962
Add: pull
t
moving average line
Mar 1964
g average line
line a
ine a
red week huge volume but gives up small amount
line
g
mou
5/1
5/1
5/1
5/1
5/1
5/1
u
b
u
5/1
u
a
o
t
a
m
e
c
r
s
Dec 1963
k j
moving
D
St
Add:
Add:
o
3 more tight 32 3 more tight t 3m 3m closing weeks g o 28 America’s Greatest Stock-Picking Secrets 41
k
d
d
m
Sep 1963
t
u
Buy B 12-week cup-with-handle i p- cup- p- p p cup -w r marke u v v e Jun 1963 Mar 1963
3 weeks 3 tight closes s g i along lows e ndle similar to 44-week cup- 68-week cup-with-handle similar to 44-week cup 44 milar ndle sim m with-handle Xerox formed in 1957 bear market n 1957 bear market n 1957 bear mark Hug Hug Dec 1962 Sep 1962
e
Xerox–1963 Weekly Chart 1962 bear market creates 1962 bear market creates r 2 the Xerox base e X Do Not Buy! Straight Do Not Buy! Straight a up from 17.5 to 32, 3 m too obvious and v market is correcting market is correcting t h p c ndle Xerox for f d n Jun 1962
Price = 20*eps 18 16 15 14 13 12 11 10 9.00 8.00 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