London Stock Exchange Studebaker reacted from this resistance level again back to around 55, and during the week ending February 19, advanced through this level to 62, which showed that the trend had turned up again, and if you had sold out and gone short with stop at 6o, you should have covered and gone long when it crossed this level. Note that for three weeks it held in a narrow range, but did not break back below 58. Then the advance was resumed and by April 2 it had reached 8o, which was above the last high price made. From this level, the stock reacted to 72, but the following week it received support at a higher level, and so on each week until the week ending April 30,1921 , when it advanced to 93, and the volume of sales was 359,760 shares. Again the week ending May 7, it fluctuated from 92 1/2 to 87 with a volume of sales amounting to 227,300. Now note that from the bottom, which was made during the week ending December 25,1920, at 37 3/4, every rally was from a higher bottom, which showed that the buying was better than the selling and that the stock had not yet reached a level where supply was greater than demand until it advanced to 93, where the large volume of sales showed that there was enough selling to check the advance. Note that the week beginning May 9,1921 , the stock opened at 86, breaking the levels of the two previous weeks where there was large volume. This was the first indication that the trend had reversed and that you should sell out and go short. This advance, which amounted to 55 points, lasted a little over four months, during which time the weekly chart shows that the trend never changed, but during this time, if you will go back over the tape, you will find dozens of times when you would have sold out and gone short and lost money. Why? Because a move that would run thirty minutes, three hours, or three days, down, would fool you and make you think that the trend had changed. After the trend on Studebaker turned down, it declined sharply until it reached 70 the week of May 28,1921 . After that you will notice it held in a narrow range for three or four weeks and only declined less than 2 points lower than this level, which showed that there was some support. Then it rallied to 82 1/2 the week ending July 9. After holding around this level for several weeks, which showed that it was again meeting with heavy selling, the trend turned down again and it declined to 64 3/4 on August 25. Then followed a sharp rally to 79 on September 10, then five or six weeks of a slow decline down to 70; then six or seven weeks more of narrow trading in a range of about four points. Finally, the week ending December 10,1921 , it crossed the levels made on September 10, but again halted around 82, the levels made on July 9 to 16. Then the advance started. The long period of time in a narrow range showed that accumulation was taking place. The advance continued, resistance levels being raised until it reached 124 1/2 on April 22,1922 . Then followed a quick decline down to 114 1/4 from which it advanced to 125 7/8, being higher than the previous level, but the stock narrowed down and the volume was small. In the week ending June 17, the stock declined to 116 5/8, again getting a higher support than the last level of 114 1/4 made on May 13,1922 . trade stock online ~ forex strategies |