how to make money in stocks and how to get rich_115

price structures. Paterns with this characteristic almost always fail,

although some of them may later tighten up their price structure and

finaly make a large-scale advance.

New England Nuclear and Houston Oil & Minerals are two cases of

price structures eventualy tightening up from previously wide, lose,

and eratic price movements. I use these two examples because mised

both of them at the time. It is always wise to review big winners you

mised to try find out whyou didn't recognize them when they were

exactly right and ready to soar intouter space.

New England Nuclear formed a wide, lose, faulty price structure that

loked like a double botom from points A, B, C, D, and E. (Se page

171.) It declined aproximately 40% from the begining at point A to

point D. That was excesive. Note the

aditional clue provided by declining trend of its relative strength line throughout the false structure.

Buying at point E was wrong. The handle also short and not

drifting down or having a shakeout.

New England Nuclear formed a second base from point E to F G.

However, if you tried to buy at point G, you were wrong again. It was

premature because the price structure wastil wide and lose. From

point E to F was a

prolonged periodown with relative strength in steep decline. The rise straight up from the bottom at point F to its

bogus breakout point G was too fast and erratic, covering only three

months. Thre months of improving relative strength versus the prior

seventeen months of decline in relative strength was not sufficient to

turn the previous poor trend into a positive one.

The stock then declined from G to H form what apeared be a

handle area for the posible cup formation from E to F G. However,

if you bought at point I on the breakout attempt, the stock failed again.

The reason: the handle was to lose—it degenerated 20%. But after

failing this time, the stock at lastightened up its price structure from I

to J to K and 15 weeks later, at K, broke out of a very tight sound base

and advanced almost 20%. Note the stock's relative strength line from

point K back to F. So you se, there realy isuch a thing as the

right and wrong time to buy a stock.