Many Leading Stocks Rising With Constructive Action

A scan of the 100-plus charts on today's Your Weekly Review show dozens trading calmly as they continue their advances.

Chart readers consider such tight trading a positive, whether it occurs during a basing area or after a stock has broken out to new highs. It's a hallmark of winning stocks.

Tight trading indicates that institutional investors are buying shares, making measured purchases to avoid having the stock run up on them. By comparison, wide and loose trading suggests indecision among investors.

In some cases, a series of three weeks with small differences in closing prices becomes a bullish chart pattern.

It's called a three-weeks-tight, a term readers sometimes find in the chart analysis that appears at the bottom of each Weekly Review and IBD 50 chart.

In this formation, the stock closes one week with less than a 1% or 1.5% difference in price from the previous week's close, then repeats that action one more week. Thus, the weekly chart shows three consecutive weeks of tight closes.

Usually, the weekly price ranges also are narrow.

But not every set of three-tight price closes should be considered a bullish price pattern.

The three-weeks-tight tends to work better with the market's best leaders. Also, with stocks that usually trade calmly, a three weeks tight does not mean much.

One Weekly Review stock that has formed a proper three-weeks-tight is Alaska Air Group (ALK). It formed its pattern in January and is now slightly above the 47.93 buy point. Shares of the airline are trading near a record high.

SodaStream (SODA) is another stock that formed a three-weeks-tight.

The pattern formed in the early part of January, and shares cleared the 50.08 buy point on Jan. 22. The stock momentarily slid back to the area of the three-weeks-tight but rebounded.

source
please give me comments thanks