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Strategies & Market Trends : Point and Figure Charting
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To: Dennis J. who wrote (12932)1/22/1999 1:58:00 AM
From: Smooth Drive  Read Replies (4) of 34811
 
CHART'N THE DOW -- MO

Sue the BASTARDS!!

The only thing I like better than bad news for a defense stock (eatum, smokeum, drikum, etc) that pays a dividend, is more bad news.

Let's take a peek at MO:

60                       * 
59                       X *
58                       X O *
57                       X O   *
56                       X O     *
55                       X C X   X * < Bearish Resistance Line
54                       X O X O X O
53                       B O X O X O
52                       X O   1   O 
51                       X *       O < Triple Bottom Sell Signal
50                       X   *     O
49                   X   X     * + O < True Penetration of the BSL
48               X   X O X     + * O 
47               X O X O X   +     O 
46               X O X O   +       O * < 1st Bearish Support Line
45               X A     +
44       X   X   X *   +
43       X O X O X   +
42       X O X O X +   *
41       7 8   9 +       *
40 O X   X     +           *
39 O X O X   +               *
38 O 6 O X +                   *
37 O X O +                       *
36 5 X +                           * < 2nd Bearish Support Line
35 O +
34 +
33

MO is long term bearish (trading below the Bearish Resistance Line) and short term bearish (on a sell signal). First bearish price objective of 45: 59 - ((7*2)*1) = 45. With the second bearish price objective of 38: 59 - ((7*3)*1) = 38.

MO was trading range bound in the 35 to 45/48 range from Jan of 97 to its current P&F trending run which started on 6/1/98. When it reversed down from its high of 59, and then gave up more than 50% of that column of X's gains back to 52, we call that a high pole formation. This happened on 12/10/98, and 80% of the time, a high pole formation will lead to a sell signal.

And -- a triple bottom sell signal is what we got at 51 -- and then the speech, which dropped it right through the Bullish Support Line.

Think folks are going to quit smoking at $5 or $6 or whatever price per pack? Sure they will. Current dividend yield is 3.8%. As the price drops the yield go ups. Bring on the bad news.

Take care,

Eric
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