204 HOW LEGENDARY TRADERS MADE MILLIONS

Gaps up on huge volume

–CEO on CNBC

Bought at $25 on
5/02/97
Sold over several weeks
on distribution –avg.
was $59

Figure 10-5 Jabil Circuit, Inc., 1997 Daily Chart.

Source: © William O’Neil + Co., Inc. All rights reserved. Reprinted with permission.

For the next four months, from mid-April until early August, the markets
sprinted higher. The Nasdaq gained over 35% in that span, while the Dow was
not far behind, as it passed the 8,000 level in July and climbed 30% in just four
months. During this time the Fed also refrained from further increases in rates,
which pleased investors. In fact, it would begin cutting rates and not raise them
again until June of 1999. During the strong upward run, technology-, media-
and telecom-related stocks would post the best gains. These were good times as
capital investment was booming and prices were falling for central processing
units (CPUs) and memory components for computers. Consumers were reap-
ing the benefit of new technology products at lower prices. Corporate profits
were still growing at a healthy clip, and real GDP numbers were solid. Produc-
tivity was the new engine driving growth and keeping inflation well contained.
New advancements in technology were beginning to pay off in many economic
statistics that supported a positive and increasing growth phase.
A few of the other new leaders that were breaking out of sound basing
patterns during the time included Home Depot again, as it would break out
of a cup-with-handle base in May 1997 and shoot up another 431% over
the next 32 months. Yahoo was another new technology leader that broke
out of a cup-with-handle base in July, and it would rocket up 7,443% over