Problem 5-08

Currently, Charlotte Art Importers is selling at $22 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
4/1	22		4/18	32		5/3	26
4/4	27		4/19	34		5/4	25
4/5	27		4/20	36		5/5	27
4/6	27		4/21	37		5/6	27
4/7	28		4/22	35		5/9	27
4/8	29		4/25	34		5/10	27
4/11	29		4/26	34		5/11	28
4/12	31		4/27	32		5/12	29
4/13	31		4/28	31		5/13	28

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

The correct chart is -Select-chart Achart Bchart Cchart DItem 1 .

A.

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	X
28	X	O	X
27	X	O	X
26	X	O	X
25	X
24	X
23	X
22	X
21
20
19
18

B.

39
38
37
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
25	X	O	X
24	X	O	X
23	X	O	X
22	X	O	X
21		O	X
20
19
18

C.

39
38
37
36
35
34	X	O
33	X	O
32	X	O
31	X	O
30	X	O
29	X	O	X	O
28	X	O	X	O
27	X	O	X	O
26	X	O	X	O
25	X	O	X
24	X	O	X
23	X
22	X
21
20
19
18

D.

39
38
37
36
35
34
33			X	O
32			X	O
31			X	O
30			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	O	X
23	X	O	X
22	X	O	X
21		O	X
20		O	X
19		O	X
18