ABSTRACT
The specifications of the kind of stock we want to chart are fairly simple, and they are few. We want a stock which will enable us to make a profit through trading operations. That means a stock whose price will move over a wide enough range to make trading worthwhile. There are those who are concerned mainly with safety of principal and the assurance of income from a stock. For them, there are
(EN9: Or were.)
stocks which afford a very considerable degree of stability. You may (and probably will) want to keep a substantial part of your total capital in stocks of this type. They move in a narrow price range. They are extremely resistant to downside breaks in the market. They are also (and necessarily) unresponsive to fast upside moves in the market as a whole. These stocks are highly desirable for the conservative investor. However, they are not the most suitable issues for trading operations, since their swings are small, and commissions would tend to diminish the narrow trading profits that could be taken. Also, they do not make the sharp, clear chart patterns of the more speculative issues, but move in rounding, sluggish undulations.
