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Technology Stocks : THQ,Inc. (THQI)

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To: Raymond James Norris who wrote (13311)	2/11/2000 10:31:00 PM
From: Dennis K. Showers	Read Replies (2) of 14266

<First, one day does not make a trend.> I agree. The hammer formation only says that the current trend should end. As I said we can either trend sideways or we can reverse direction. In addition you said the hammer was on weak volume. That is not true. The actual hammer was yesterday and it was on HUGE volume. Today's confirmation was on weaker volume which is not as important as the hammer day and the day preceding it. Consider that the bulls were on the run and decided to turn and fight. There was a hell of a battle that took place yesterday and the day before. An exchange of millions of shares took place. At the end of the battle the bulls had pushed the price up to yesterday's close. Today the bulls were in control. The direction has turned. Every bear yesterday is now loosing money. <this would only be a first step in a long process to repair the chart.> That is correct, but many times after a hammer formation the first step is the beginning of a real race. Is it possible that there are still many shares short and that these shorts have just erased much of the lose that they had just one month ago. If the price starts to rise don't you think that those shorts may want to cover now? If they start to cover the price may rise quickly. If you were a shorter of stocks would this be a good place to try and establish a short position. I don't think so. I take your point about the broken trend line very seriously. You are correct that the line is now serious resistance. The more times it fails, the stronger it becomes. There was no hammer on February 1. The pattern is a three day pattern set up by a dramatic down day on which the stock opens and then moves steadily down throughout the day and closed at it's low. That was Wed. In fact Wed. was just a continuation of Tuesday's downward movement. The day following the huge down day the stock gaps down (ideally) and falls considerably and then recovers to close near it's open. It does not matter much if it is above or below the open.What matters most is that the shadow of the candlestick is at least 2 times the length of the real body. The third day of the pattern is the confirmation of the pattern. The stock opens (again a gap up would be nice) and then moves up throughout the day and closes at it's high or near it's high. The pattern is complete. The only thing we had on the first was the shadow that was twice as long as the real body. An example of a hammer formation was on March 23, 24, and 25 of 1999. You will note that there was a near hammer formation on March 1 but there were several things wrong with it and it failed. For today's confirmation I would have liked to have seen greater volume and a greater increase in stock price to give a stronger signal. But it may have been weakened by the bad day in the rest of the market. The fact that we seemed to have stopped falling on such a down market day is also positive to me. I have a question. I have often seen the term 'sku' used but I have never seen its definition. It's driving me crazy. Can someone enlighten me. Thanks. Whitetail

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