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Reading Price
❑ Strong Closes
❑ Weak Closes
‘Skyscrapers’ or
More up days ‘Star Stepping’ Biggest volume ❑Gap Up (strength)
than down days Up volume since base ❑ Lap Up (strength)
Reading Volume
❑ Number of days
Negative
up or down
❑ Stair stepping
volume up or down
More down days ‘Star Stepping’ ‘Skyscrapers’ or ❑ Sky Scrapers Up
than up days Down volume Biggest volume
since base or down
Sound Bases:
❑Early stage bases
❑Prior uptrend
❑Handles in upper ½
❑Acc/Dist C or higher
❑Shakeouts near base low & in
handles
❑Strong RS 80 or greater at pivot
❑RS line at NH at or before
breakouts
Volume
❑Large up volume; light down
volume
❑Volume dries up in handle
❑Strong up volume on right side
of a base
❑Big volume at breakout 40% or
more
Price Action:
❑Tight Action not wide & lose
❑Tight closes
❑Closes near top of the range
❑Support at key moving
averages
❑Gap ups
left high side Cups (with/without handles)
❑Tea-cup shaped
❑ 7 Weeks or more
❑ 20-30% deep (50% bear market)
❑U shaped not V shaped
❑Pivot 0.10¢ above handle high or
no handle +10¢ left side high
Ascending Base
❑Overall uptrend-3 pullbacks
with higher high & higher lows
❑ Length 9-16 Weeks
❑Depth 10-20%
❑Pivot +0.10¢ above left side
of high on 3rd pullback
❑Not usually a 1st stage base
❑Often formed when stock
resists general market
weakness
High Tight Flag
Flagpole up 100% or more
Typically in 4 to 8 weeks
Once a stock
is 5% past its
previous
high, the
stock is
extended
IPO Base Secondary Buy Points
❑20% Prior uptrend
❑At least 9 day base
❑Max 20-25% correction in base
❑Best- RS outperforms market
❑Best - leading Industry Group
❑Best- Quality sponsorship
❑Pivot previous high +0.10¢
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