Bullish Looking Chart Patterns DOLE @ 11.12
THE GRAND STRATEGY OF STOCK TRADING
THE STOCK TELL YOU THAT IT HAS MADE A BOTTOM OR A TOP BY SACRIFICING A POINT OR SO FOR INSURANCE.
The Most Bullish Looking Chart Patterns
All your buying for maximum profits should be concentrated on stocks having the following types of chart patterns:
1. Long-term decline followed by a breakout ………………………………….DBA is making this chart
2. Flat base breakout
3. Coming off a double bottom
4. W Pattern
5. Growth
6. Cyclical at historic lows
Let us examine each of these separately:
1. Long-term decline followed by a breakout
This pattern is mentioned first because it is capable of producing the greatest capital gains. The pattern is exactly as described, a long-term decline (the longer the better) followed by an eventual bullish reversal above a previous declining peak. The stock gains an upside impetus commensurate with the duration and extent o f the previous decline. The theory here is that the stock has been so utterly oversold that upon the first evidence of a turn for the better the stock will advance at a greater rate than it previously declined. Let me add-MORE GAINS OF 10070 AND BETTER OVER A SHORT PERIOD OF TIME HAVE SPRUNG FROM THIS TYPE OF CHART FORMATION THAN FROM ANY OTHER. (A successful parlay of ten such gains can turn $1,000 into $250,000.)
2. Flat Base Breakout
The longer the price of a stock remains in a very restricted range of fluctuation the greater is the potential rise upon a breakout above that price range. If the line of accumulation is at the bottom of a previous long-term decline so much the better. A stock coming off a 10-year base is potentially ten times more bullish than a stock coming off a 1-year base. The base or plateau may be at a more advanced level but the same principle holds, a move above that restricted price line is quite bullish. The more advanced the plateau is the less bullish it is, the lower the base line the more bullish. Suppose a stock was once priced
THE GRAND STRATEGY OF STOCK TRADING 217
at $40 and then went into a severe long-term decline down to $5. Suppose it then fluctuated between $5 and $10 for ten years and then suddenly one day managed to close at $11. The stock would be screaming to be bought, having evidenced a degree of strength unseen in a decade. That would constitute a classic flat base breakout and the chances of catching a 1000/" gain or better over the near-term by buying at $11 a share would be excellent.
Sentiment: Strong Buy