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78 1915 February 1st, low 38, February 3rd, high 41 1/2 - a 3 point rally indicated a buying point. Either buy at market or on a reaction. We buy 100 shares at 41. On February 5th, it declined to 38 3/4, then crossed 41 1/2, the top of February 3rd, and turned Overnight trend up. Stop would now be at 36 1/2 or 3 points under 39 1/2. Trend continued up to 45 on February 13th, then declined to 40 1/2 on February 24th, making a higher bottom than February 5th. Raise stop to 38 1/2 or 2 points under 2 bottoms close together. March 8th, high 46, then made 3 bottoms around 43 1/2 to 44 1/4 on March 5, 13 and 18. Here raise stop to 42 1/2 or one point under three bottoms. Then we buy more at 47 when it goes one point above top at 46. Trend continues up to 49 3/4 on March 29th; again made three bottoms around 47 3/4 to 48 1/4; raise stop to 46 3/4. Then we buy more at 51 and raise stop on three lots to 48. The advance continued to 58 on April 10th, reacted to 55 1/4 on April 13th. We raise stop to 52 1/4 or three points under. April 19th made top 60 3/4, reacted to 56 3/4 on April 24th. Raise stop to 55 1/4, last bottom. April 26, high 59 1/4, April 27th, low 57, a third higher bottom. Raise stop to 56 on all three lots. April 29 high 60 5/8, just 1/8 under top of April 19th. April 30th, low 58 1/2. Raise stop to 57 1/2. May 3rd advanced to 60 3/4, the third top around same level, where we should either sell out and go short with stop at 63 3/4 or leave stop at 57 1/2. We sold on stop at 57 1/2. 1st purchase: 100 at 41, sold at 57 1/2- profit- 16 1/2 points 2nd purchase: 100 at 47, sold at 57 1/4- profit- 10 1/2 points 3rd purchase: 100 at 51, sold at 57 1/2- profit- 6 1/2 points or a total of...........33 1/2 points on 100 shares...........$3,350.00 Deduct $100.00 for commission, tax and interest... $100.00 Net gain................$3,250.00 Then we increase trading to 200 shares, but loss must be limited to $600.00, or three points on each 100 shares. This would give us 200 short at 57 1/2, with stop at 60 1/2. Decline followad, broke three bottoms made April 24, 27 and 30. We sell 200 shares more at 54 1/3. Decline continued to 48 1/4, where there were three bottoms March 26th and 31st and April 1st. Rule says, buy the fourth time with one point stop. We covered 300 shares short at 48 1/2 and bought 200 at 48 1/2 with stop at 46 3/4, which was one point under bottom of March 26th and April 1st. The profits are as follows: Sold 200: at 57 1/2, closed at 48 1/2- profit $1,800.00 Sold 200: at 54 1/4, closed at 48 1/2- profit $1,150.00 Total.....$2,950.00
Commission and taxes................................$116.00 Net profit.............$2,834.00 Previous capital and profits .....................$6,250.00 Total capital..........$9,084.00 This will allow 300 shares as a trading unit with risk limited to $900.00 on each trade. We bought 200 at 48 1/2 when we covered shorts, then we have 100 more to buy later. The stock advanced to 55 1/4 on May 12th. If we were watching the resistance level of 54 1/2 or 1/2 from 60 3/4 to 48 1/4, we would expect top and a reaction and could have sold out longs and gone short at 54 1/2 with stop at 57 1/2, but we waited for a change on the Overnight Chart. May 14th, low 49 3/4. Here we buy 100 more at 50 1/2, then make stop on 300 at 48. The advance was resumed on May 17th made 53 1/2, then reacted to 51 3/4, then turned trend up again. We would now; raise stop to 49 3/4, the last bottom. May 24th, high 56 1/4 and crossing 54 1/2, the 1/2 point, the second time indicated higher. May 26th and June 1st reacted to 53 1/4 and made double bottom. Raise stop to 50 3/4 or one point under previous low level when it crossed 56 1/4, last top, buy 200 more at 56 1/2 and raised stop on all trades to 52 1/4, one point under last double bottom. June 4th the stock advanced to 64 1/8. June 9th declined to 56 3/4. Holding above 56 1/4, the 1/2 point from last low of 48 1/4 to high of 64 1/8, was a sign of strong support and showed that the main trend was up because the stock had gone three points above the triple tops made on April 19th and 29th and May 3rd. From June 9th, a rally followed to June 12th, when the high was 61 1/4. We now raise stops to 55 3/4 or one point under low of June 9th. June 14th declined to 59, then raise stop on all trades to 58. This stop was never caught. The stock advanced to 61 3/4 on June 22nd, then after a series of lower tops and bottoms, declined to 58 1/4 on July 7th, then rallied to 59 1/4 on July 9th, and declined same day to 58 1/4, making a double bottom from which advance was resumed and on July 17th reached 65 1/8, reacted to 62 1/2 on July 20th, rallied to 62 1/8 on the 26th and declined same day to 62 3/4, making a double bottom again. Then it went to new high and crossed 66 3/8, the 1/2 point from 94 7/8 to 38. We bought more at low of July 26th. We buy 200 more at 72. August 10th: high 76 3/4 August 11th: declined to 73 5/8 August 12th: advanced to 75 1/2 August 14th: declined to 73 3/8 August 18th: advanced to 77 5/8 We now raise stop on all trades to 72 3/8, or one point under the last bottom at 73 3/8. The stop was caught and we sold short 400
September 10th September 11th September 14th September 17th advanced to 76 1/4 declined to 73 3/4 rallied to 76 declined to 74 1/4 shares at 72 3/8. The account now stands as follows: Bought 200: at 48 1/2- closed at 72 3/8- profit..$ 6,725.00 Bought 100: at 50 1/2- closed at 72 3/8- profit..$ 2,162,50 Bought 200: at 56 1/2- closed at 72 3/8- profit..$ 3,125.00 Bought 200: at 67 - closed at 72 3/8- profit..$ 1,075.00 Bought 200: at 72 - closed at 72 3/8- profit..$13,087.50 Less loss of 3/8 on 200.$ 75.00 Less commissions and taxes........................$ 225.00 Net gain................$12,787.50 Previous oapital........$ 9,084.00 Operating capital.......$21,871.50 This would give a limit of 700 shares as a trading unit. Sold 400: short at 72 3/8 Sold 300: short at 69 3/8 Always calculate the 1/2 point of a previous move. Last low, 58 1/8, July 9th to 77 5/8 high, August 18th, making 1/2 point at 67 7/8. August 23rd, declined to 67 3/4. Here we cover shorts and buy 700 longs at 68 1/2, stop 64 7/8. However, a stop at 66 7/8, just one point under 1/2 point, would have held, as low of 67 3/4 was not reached again. Our account stands as follows: Sold 400: at 72 3/8- closed at 68 1/2- profit.....$ 1,750.00 Sold 300: at 69 3/8- closed at 68 1/2- profit.....$ 252.50 Total..................$ 2,002.50 Less commissions and taxes........................$ 175.00 Previous capital.......$21,871.50 Operating capital......$23,698.00 We continue with 700 shares as trading units. We are now long of 700 shares bought at 68 1/2 with stops 64 7/8. We buy 300 at 72. August 27th: advanced to 77 September 1st: declined to 73 3/4 September 2nd: rallied to 76 3/4 Here we raise stop to 72 3/4, just one point under September 1st low.
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