flat base is another rewarding price structure. It is usually a second-stage base that occurs after a stock has advanced 20% or more off a cup with handle, saucer with handle, or double bottom. The flat base moves straight sideways in a fairly tight price range for at least five or six weeks, and it does not correct more than 10% to 15%.

Be careful of selling on bad news or rumors; they may be of temporary influence. Rumors are sometimes started to scare individual investors—the little fish—out of their holdings.

Therefore, you should apply your CAN SLIM system and select the best possible stock at the best possible time.

The pivot buy point in a double bottom is located on the top right side of the W, where the stock is coming up after the second leg down. The pivot point should be equal in price to the top of the middle peak of the W, which should stop somewhere a little below the pattern’s peak price.

Stocks that show a 20% profit in less than eight weeks should be held through the eight weeks unless they are of poor quality without institutional sponsorship or strong group action. In many cases, stocks that advance dramatically by 20% or more in only one to four weeks are the most powerful stocks of all—capable of doubling, tripling, or more.

price drop in a proper handle should be contained within 8% to 12% of its peak during bull markets unless the stock forms a very large cup,

It’s normal for growth stocks to create cup patterns during intermediate declines in the general market and to correct 1½ to 2½ times the market averages.

Climax top activity. Sell if a stock’s advance gets so active that it has a rapid price run-up for two or three weeks on a weekly chart, or for seven of eight days in a row or eight of ten days on a daily chart.

Sell when there’s a great deal of excitement about a stock and it’s obvious to everyone that the stock is going higher. By then it’s too late. Jack