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Technology Stocks : PairGain Technologies
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To: P314159d who wrote (34653)11/16/1999 2:35:00 AM
From: Doug R  Read Replies (2) of 36349
 
P,

I'll take MANU here since I'm closely familiar with the chart.
MANU has the specific situation involving the recent gap down in Sept. as a consideration. In that case, the initial target comes off the low on 8/5 across the high of the day it gapped down. That target was reached on 11/2 and 11/3. An opportunity to trade out and buy back on the dip was seen.
The situation now is one where a triple "top" at 14 1/2 was taken out today. This calls for a different targeting technique....one that results in a "static" rather than "dynamic" target. The lowest point during the period within which the triple top was established is $9. The distance from there to the resistance at 14 1/2 is 5 1/2 points. Add 5 1/2 to 14 1/2 and the relatively short term target is 20.
On a weekly chart there is a definite inverted head and shoulders formation from 1/99 with a neckline that is about 11 points above the lowest price. The breakout of that formation at 15 1/4 will project an intermediate term target of 26ish.
Considering that a followthrough of the short term breakout should lead to a breakout of the intermediate term profile, it would be reasonable to surmise that the intermediate term target will be achieved. Also, in cases of breakouts across different techniques, it is very often the case that the whole is greater than the sum of the parts so you can expect the intermediate term target to be reached sooner than would normally be expected.
Once "26ish" has been reached, there would be a need for reassessment.

Draw the line from the 5/4/99 low to the 9/7/99 high on SYBS ....target hit...walk away.

Doug R
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