Wedges, triangles, and stuff: Chart patterns for breakouts Message Board

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Strategies & Market Trends : Wedges, triangles, and stuff: Chart patterns for breakouts

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To: HeyRainier who wrote (31)	5/29/1997 2:47:00 PM
From: Mike Kehler	of 257

Back to charting... Check out chart of GEMS, looks like it might be about to break out of a wedge. Volume looks right (i.e. decreasing) except for last two days (and again today) it has been pretty heavy - so if we aren't breaking out now then this pattern is dead. Also is interesting that the pattern has bearish implications, yet it looks to be breaking out on the upside. On fundamental basis I like their long term growth prospects (i.e. PCS wireless). I have not homework recently, but expect they are not particularly attractive based on current earnings & growth. Also a quick comment on MU. You sure were right about the recent break-out, congratulations on yet another good read. Also have a look at the [rather large] wedge from about 8/96 - 4/97. Volume was pretty clear on weekly chart, but hard to see on the daily. The wedge was completed when MU broke down out of the pattern in early April. Now, for the interesting part... it looks like we are testing the lower trendline for the second time since then. Should be interesting to see where we go from here, IMO a failed second test will be technically significant (and bearish of course). On pure speculation I straddled this one yesterday (June expiration with strikes at 40 and 45). I chose a straddle because public seems to be on love with this stock even though fundamentals are horrible. Btw, I am still be interested in hearing your opinion on SEG (both technically and fundamentally). Mike

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