ABSTRACT
In choosing your stocks, you will probably look for the greatest diversity in the
kind
of industry. Since you are not specializing in the detailed study of a single group, you will try to get stocks from as many different groups as possible. You will want to include mines and oils, rails and chemicals, liquors and amusements, airlines, utilities, techs, Internets, biotechs,
ad infinitum
…. The reason for this is simply that, very often, many stocks in a particular industrial group will show the same or similar patterns, as the entire industry is affected by certain Major conditions. You will often find, for instance, that when Allis-Chalmers
(EN: or Dell)
makes a Triangle or other Area Pattern, followed by a sharp upward move, Deere
(EN: or Compaq)
, MinneapolisMoline, Harvester, and Case will make similar Triangles, or possibly Rectangles or some other Consolidation Pattern, followed by a similar upward move. When Schenley is moving in a long downtrend, you will very likely find that Distillers — Seagrams, National Distillers, Publicker, and American Distilling — are also moving in a long downtrend.
