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Strategies & Market Trends : Point and Figure Charting
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To: Lucretius who wrote (2799)5/5/1998 1:03:00 AM
From: Ms. X  Read Replies (4) of 34810
 
Higher Highs and Higher Lows - From DWA

Over the next few weeks we will discuss different chart patterns such
as shakeouts, triangles, and bearish signal reversals. When going over
each of these patterns we will show what to look for and how to
evaluate each situation. Today we want to look at stocks that have
formed a series of higher tops and higher bottoms. These patterns are
called Bullish Signals. Basically, this is a formation that consist of
a continuous stream of the most basic of buy signals: the double top,
which is followed by higher bottoms. When looking at stocks with these
characteristics you can clearly see that demand is in control and
supply is drying up. One other positive aspect of this formation is
that it gives an investor many stop points to pick from and he can
choose the one that best fits his tolerance for risk.

With the market in extended territory and the recent reversal down in
the Optional Bullish percent, we have limited our search to those
stocks with positive relative strength and who are members of low
lying sectors. Below we discuss two stocks that meet these criteria.

Pittway Corporation [PRY] manufactures and distributes burglar and
commercial fire alarm equipment and other low voltage products. After
breaking through an area of consolidation in late May of last year
Pittway has been on a nice uptrend ever since. The stock has given six
consecutive buy signals all followed by higher bottoms. Relative
strength remains strong in a column of X's and on a buy signal
suggesting PRY.A is outperforming the market. Pittway belongs to the
Protection & Safety sector which is currently in Bull Confirmed 54%
making this one of the lower sectors and one in which positions may be
initiated. Demand is clearly in control here. The first sign of
trouble will be a double bottom break at 68.

78 | |
77 | | Top
76 | |
75 --------------+---------------------+-----X--------
74 | | X
73 | | X 4
72 | | 3 O X
71 | | X O X Med
70 --------------|-------------------X-|-X-O-X--------
69 | X O X O
68 | X O X
67 | A X 1 X
66 | X O X O 2 Bot
65 --------------|---------------X-O-X-O-X------------
64 | X O C O X
63 | X O X O
62 | X O X |
61 | 9 O X |
60 --------------|-----------X---8-O---|--------------
59 | X O X | *
58 | X O X | *
57 | X X O X | *
56 | 5 O X O | *
55 ----------C---1---X---X-O-X---------|-*------------
54 X O X O 3 O X O X |
53 X O X O 2 O X O 7 * |
52 X O X O X O 4 O X * |
51 X O X O X O X O X * |
50 ----------X-O-X-O---O-X-6---*-------|--------------
49 9 B O | O * |
48 X O X | * |
47 X O X | * |
46 X O A | * |
45 ------8-O-X---|---*-----------------|--------------
44 X X O X | * |
43 X O X O | |
42 X O X * | |
41 X O * | |
40 --X-----*-----|---------------------|--------------
39 * | |
38 | |

Tenet Healthcare Corporation, through its subsidiaries, owns or
operates 129 acute-care hospitals and related health-care businesses
serving communities in 22 states. As you can see from the chart below
demand has been in control of this stock for the past year. THC has
given five consecutive buy signals along with a series of higher
bottoms. The last buy signal came at 35. After breaking this top Tenet
Healthcare continued to rally to 40 marking a new chart high before
taking a breather and reversing back down. On the fundamental side THC
is rated a +Buy by Goldmanm Sachs & Co. The stock could use a bit more
of a pullback before initiating positions but it is one to watch.

43 | | |
42 | | | Top
41 | | |
40 ----------+-------+-----------------------4--------
39 | | 3 O
38 | | X O Med
37 | | X O
36 | | 2
35 ----------+-------+-----------------------X--------
34 | | X 1
33 | | X C O X Bot
32 | | X O B O X
31 | | X X O X O <- Higher bottom
30 ----------|-------|-------7---X-O-A-O-X---|--------
29 | X 6 O X O X O X |
28 | 2 O 4 X O X 8 X O <- Higher bottom
27 | X O X O 5 O X O X |
26 | X 3 X O X O O |
25 ----------|-------X-O---O-X---------------|---*----
24 | 1 O | *
23 | 9 *
22 2 X X * |
21 1 O X O 8 * |
20 ----------X-O-X-O-X-----------------*-----|--------
19.5 X 5 X 7 X * |
19.0 ---------C-O-X-O-X-------------*---------|--------
18.5 B O O | * |
18.0 ---------A-------|---------*-------------|--------
17.5 5 X | * |
17.0 -X---X-O-X-------|-----*-----------------|--------
16.5 4 O X O 9 | * |
16.0 -X-O-X-O-8-------|-*---------------------|--------
15.5 X O O X | |
15.0 -------O-7-----*-|-----------------------|--------
14.5 6 X * | |
14.0 -------O-X-*-----|-----------------------|--------
13.5 O | | |
13.0 -------*-|-------|-----------------------|--------
12.5 | | |
12.0 ---------|-------|-----------------------|--------

Market Commentary: Black Gold 5-1-98
Message 4296099
Market Commentary: A New Dawn 4-30-98
Message 4275191
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