SRP announced to the market this week a strong recovery in second half earnings, plus a rather large merger with the Rosemount wine group. This merger is expected to create the 7th largest wine company in the world.

The chart clearly shows some Dow theory at work here:a large increase in volume of shares traded around the end of January, pushing the stock upwards, therefore the volume is on the buying side, and into higher levels than all of last year. This tells you to expect good news, either increasing earnings, or an announcement that is earnings per share positive. We got both.

Someone on the inside always knows what's coming, acts on the information, which must be through the market, picked up by the share price and revealed in the chart. The question then remains, have you done enough study of past history to pick up the constantly repeating patterns.