Pick Stock Then increased volume and great activity started and the stock advanced to 139 3/8 on July 19,1922 , where the volume during the last two weeks amounted to 400,000 shares. Besides, the volume on the advance from 116 5/8 up to 139 3/8 amounted to 1,6oo,ooo shares, which was nearly three times the total capital stock outstanding and probably five or six times the floating supply of stock. This showed plainly that distribution was taking place, and that the public was buying this stock and that the insiders were selling out. A decline started and on August 12,1922 , it declined to 123, but the volume was only 11o,ooo. The following week it fluctuated in about a four-point range with a volume of only 46,000, which showed that the selling pressure was not yet great enough to bring about a big decline. It advanced to 134 and again declined to 123 3/4 on September 30, failing to go through the level made on August 12. After this, a rapid advance started and in the week ending October 14,1922 , it advanced to 139 3/8, the same level made on July 19. The volume of sales was 205,000 shares this week, which was an indication that selling was taking place and that you should sell out and go short with a stop loss order one or two points above the old level. The following week that volume of sales was 242,000 and the stock declined to 129, a plain indication that the selling was greater than the buying. The stock continued to work lower, but met with stubborn resistance around 123 to 122 where it held for two weeks. Finally, in the week ending November 25,1922, it declined rapidly to 116 and on Monday, November 27, it declined to 114 1/4, the same low level it made on the reaction May 13,1922. Now the man who is simply standing at the ticker watching the tape would hardly remember that 114 1/4 was the low price made on May 13, therefore the last point where support was given, and from which it rallied to new high levels. But the man who had the record of the tape on a chart would certainly be watching this point. When it reached 114 1/4 large volume of sales appeared on the tape and it showed plainly that the support was there. This was the point to buy the stock protected with a stop loss order one to two points below the old resistance level of 114 1/4. The stock rallied to 123 3/4 the week ending December 2, 1922 , and the volume of sales was 240,000 shares, which showed that the buying was better than the selling. Note that the two previous weeks the highest point was 125 1/2. In the week beginning December 9, the stock was very active and the volume of trading large. A stock dividend of 25 per cent was declared, and the stock advanced to 134 1/4, the volume of sales being 500,000 shares for that week, which was the largest for any week since the stock sold at 37 3/4 in December, 1920. This was plain evidence that the public was buying stock and that it was in the zone of excitement and great activity which nearly always marks the end of a movement up or down. The advance continued, the stock reaching 1413/4, a new high level on December 27,1922 , which was just two days before it sold ex-stock dividend. The volume of sales for the week ending December 30 amounted to 240,000 shares. After the stock sold ex-dividend, it declined to 110 3/8, then rallied to 119 on January 2,1923 , which would equal 148 3/4 counting the stock dividend of 25 per cent. pick stock ~ currency converter |