How to Identify Stocks with Independent Trends?
Auburn Motors
This stock often moved independently, contrary to other auto stocks: it rose when others fell, and vice versa.
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May 1933: Low at $28.75.
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August 1932: High at $81.
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February 1932: Low at $31 ($2.25 above the 1933 low, signaling support).
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July 1933: Peaked at $84.25 (only $3.25 above the 1932 high), then reversed.
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October 1933: Fell to $31 (matching the 1932 low).
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March 1934: Rebounded to $57.375 (below prior highs, showing weakness).
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June 1934: Broke all lows, trading at $29–$31.
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July 1934: Plunged to $17.
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October 1934: Rebounded to $30 but failed to break out, signaling further decline.
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March 1935: Hit a new low at $15.
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August 1935: Surpassed $30 (above prior highs), confirming an uptrend.
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October 1935: Rallied to $45.5.
Chrysler vs. Auburn
Comparative strength at key points:
| Period | Chrysler Price | Auburn Price |
|---|---|---|
| June 1932 | $5 | $77.125 |
| February 1933 | $7.75 (low) | $31.25 (low) |
| September 1933 | $52.875 (high) | $45 (down $39 from July 1933 high) |
| August 1934 | $29.25 (low) | $17 (low) |
| July 1935 | Broke $60.375 (prior high) | Below 1934 highs |
| October 1935 | $88.75 | $45 |
Key Takeaways
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Follow Individual Trends: Chrysler’s strength in 1935 vs. Auburn’s weakness proves the rule: buy the strongest stocks.
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Timing Matters: Chrysler peaked earlier (October 1928) than other auto stocks, while Auburn topped at the 1929 bull market’s end. By April 1931, Chrysler hit $295.5 while others were still declining.
