eBook

Problem $5-08$

Currently, Charlotte Art Importers is selling at $$23$ per share. Although you are somewhat dubious about technical analysis, you want to know how technicians who use point$-$and$-$figure charts would view this stock. You decide to note one$-$point movements and three$-$point reversals. You gather the following historical price information:

Date Price Date Price Date Price

$4/1234/18335/327$

$4/4284/19355/426$

$4/5284/20375/528$

$4/6284/21385/628$

$4/7294/22365/928$

$4/8304/25355/1028$

$4/11304/26355/1129$

$4/12324/27335/1230$

$4/13324/28325/1329$

Choose the correct point$-$and$-$figure chart where Xs are used for uptrends and Os are used for downtrends.

The correct chart is

$-$Select$-$

$.$

A$.$

$40$

$39$

$38$ X O

$37$ X O

$36$ X O

$35$ X O

$34$ X O

$33$ X O

$32$ X O

$31$ X O

$30$ X O X

$29$ X O X

$28$ X O X

$27$ X O X

$26$ X

$25$ X

$24$ X

$23$ X

$22$

$21$

$20$

$19$

B$.$

$40$

$39$

$38$

$37$ X O

$36$ X O

$35$ X O

$34$ X O

$33$ X O

$32$ X O

$31$ X O

$30$ X O

$29$ X O

$28$ X O

$27$ X O

$26$ X O X

$25$ X O X

$24$ X O X

$23$ X O X

$22$ O X

$21$

$20$

$19$

C$.$

$40$

$39$

$38$

$37$

$36$

$35$ X O

$34$ X O

$33$ X O

$32$ X O

$31$ X O

$30$ X O X O

$29$ X O X O

$28$ X O X O

$27$ X O X O

$26$ X O X

$25$ X O X

$24$ X

$23$ X

$22$

$21$

$20$

$19$

D$.$

$40$

$39$

$38$

$37$

$36$

$35$

$34$ X O

$33$ X O

$32$ X O

$31$ X O

$30$ X O X O

$29$ X O X O

$28$ X O X O

$27$ X O X

$26$ X O X

$25$ X O X

$24$ X O X

$23$ X O X

$22$ O X

$21$ O X

$20$ O X

$19$