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Strategies & Market Trends : Technical Analysis With Charts

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To: MACD X who wrote (199)	8/29/2004 12:30:07 PM
From: cthruu	of 6865

There are a couple of additional points. If you connect the lows of Jan 9,02 (17.40) and Feb 7, 03 (20.45), the trendline intersected this last wave at around 32. That support should not have broken and SMH should have reversed from 32, if the longer term trend were to continue. Further, if you look at the chart, Jan 12, 2004 high was 45.78 and May 3, 2004 low was 34.50. There was a complex H&S (or rounded top, or inverted cup-and-handle - whatever you may call it) pattern between these pivot points and the neckline broke with gap on 7/14. That gap has still not been filled. I posted that chart as a wedge and H&S breakdown then. The measurement for that breakdown is in 23.35 area. I expect 26.50 support to give a bounce to SMH. If that bounce holds and SMH makes a successful re-test then I will believe that the trend has changed. An failure of the re-test should make the other measurements. The patterns and measurements work on most occasions. Sometimes they break and those are the times when traders need to be nimble. However mostly I rely on an ongoing pattern.

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