Star-Crossed Mystery Charts
by John Sweeney
For the May Mystery Chart (Figure 1), I contrasted theperformance of two blue-chips headed, I said, in
different directions despite their industry fundamentals. Which stocks were they and where would they be
in a year?
This combination was correctly identified by just two industrious stockpickers, Robert Mitchell of
Hanover, NH, and Bernard Dyer of Los Angeles. Both knew IBM and GM charts when they saw them
and both sent in technical arguments for the future, one bullish and one bearish. Figure 2 is an update of
IBM and GM.
In reviewing the arguments, which are given below, I eventually gave Mr. Mitchell the nod for the most
thorough analysis, since he postulated that both would rise with the market and then he needed to
differentiate, based on relative strength, which would do better in order to arrive at this prediction. In the
process, he brought to bear, just about every tool a Certified Technical Genius might bring up on short
notice from resistance levels to media sentiment, displaying a deft grasp of the English language as well
as the market.
Mr. Dyer's short and simple explanation I also found attractive, especially his channel approach
supplemented with a simple Elliott wave count. I did have to knock off points for the lack of explanation
for the upward curve of the IBM channel while GM continued downward. He gets credit for knowing the
charts but less for technique.
So where are IBM and GM going? Mitchell puts GM at 69 1/2 and IBM at 145 5/8 (I love precision!).
Dyer's calling IBM at 101 and GM at 33.