Please ensure Javascript is enabled for purposes of website accessibility

Sideways, but Accumulation Rises

Last week saw buying climaxes at 41 with selling climaxes at 46. Fairly subdued levels as the range-bound action on the indices continues. Buying climaxes were greatest among Health Care (4), Banks (3), Media (3), Biomedics (2), Buildings (2), Retailing (2),...

Dividend Digest 272, May 13, 2015

Last week saw buying climaxes at 41 with selling climaxes at 46. Fairly subdued levels as the range-bound action on the indices continues.

Buying climaxes were greatest among Health Care (4), Banks (3), Media (3), Biomedics (2), Buildings (2), Retailing (2), Semiconductors (2), Leisure (2) and Food Beverages (2). Many of these were just pullbacks to trend so they carry little significance for now.

Selling climaxes were highest among Real Estate (7), Electronics (4), Internet (3), Telecom (3), Europe (3), Business Production Services (3), Biomedics (2), Retailing (2) and Transport Non-Air (2).

Buying climaxes take place when a stock makes a 12-month high, but closes the week with a loss. They are a sign of distribution and indicate that stocks are moving from strong hands to weak ones. Selling climaxes occur when a stock makes a new 12-month low, but then closes the week with a gain. They are a sign of accumulation and indicate that stocks are passing from weak hands to strong ones. Our work shows that sellers into buying climaxes and buyers into selling climaxes are right about 80% of the time after 4-months time.

John Gray, Investors Intelligence, www.investorsintelligence.com, 914-632-0422, May 11, 2015

John Gray grew up with Point & Figure analysis. Learning from his father, Lee, who was A W Cohen’s business partner for more than 20 years, he has charted stocks and commodities for almost 45 years. After attending Bennington College and Aarhus University in Denmark, John began working full time at Chartcraft in 1979, apprenticing under AW Cohen to refine his technique from the originator of the Chartcraft method. Since AW Cohen’s death in the early 1980s, John has worked side by side with Michael Burke.