Discovering Growth Stocks and Anticipating Parabolic Moves by Richard Fruth

Author:Richard Fruth [Fruth, Richard]
Language: eng
Format: azw3, epub
Publisher: Starback Publishing Company
Published: 2014-06-11T04:00:00+00:00

PARTIII

The four general categories where a stock chart may be classified are; value, growth, parabolic and cyclical. It is possible for a value stock to become a growth stock then evolve into a parabolic stock and finally end as a cyclical stock.

Chapter Eight

Long Term Charts, Support, and Resistance

Long Term Charts

First I should mention the three charting services that I use and a little bit about each one. I have subscribed to the Trendline Daily Action Stock Charts published by Standard & Poor's Corporation continuously for the past 40 years. These, as the name obviously implies, are daily bar charts i.e. charts showing each days price action and volume and are published weekly. They show the daily activity over the past year along with 10 and 30 week moving averages of 750 different stocks. Subscriptions are available on a weekly, bimonthly or monthly basis.

On a daily basis, I go modern and turn to my computer where each evening I review online the daily charts of each stock that I hold or have an interest in possibly buying. For a number of years I have used WordenTC 2000 service. Oftentimes I will note what action I want to take the following day which allows me to sleep on my thoughts before actually following through the next morning.

Finally, the charts that most help me see the forest for the trees are the long-term monthly charts published by Securities Research Company in Boston Massachusetts. Their SRC Green Book of fifty-year charts as well as their 35 year and 12 year chart books are very helpful in finding huge bases as well as identifying those stocks in great growth trends. Companies that have been in existence more than 35 years are shown in the fifty-year book. Younger companies are shown in the 12 year chart book. I usually obtain a set on an annual basis and find the long-term perspective offered by these charts to be of immense value. As a subscriber I am able to go online to their website at www.SrcStockCharts.com where I can view and print up-to-date copies of most common stocks. I am grateful that The Securities Research Company has allowed me to reproduce several examples of their charts in this book.

Before discussing a number of charts in detail I should explain the layout that SRC uses. Plotted are the monthly price ranges represented by a solid | showing the lowest and highest point of each month's trading with a small crossbar indicating the closing price each month. All of the data is plotted on a uniform semi logarithmic grid and therefore tends to reflect percentage changes. The price scale is displayed on the right-hand side of each chart. Dividends are displayed by dashed lines with open circles which give the month in which payment was paid. Earnings are displayed on a per-share 12 months ended basis and are shown by a solid black line with black dots. The moving average shown on the chart by the dotted line represents the average closing price for the most recent 48 month period.

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