Stock Attack -- A Complete Analysis Message Board

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Strategies & Market Trends : Stock Attack -- A Complete Analysis

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To: shasta23 who wrote (3124)	8/1/1997 4:31:00 PM
From: Robert Graham	of 42787

It looks like QNTM is consolidating just above its breakout from its upper trend line. The price initially left its lower trendline into a good run up at which time the price went into a widening consolidation patter, called a broadening formation, over the past few months where there apparently was distribution. Broadening formations are usually bearish in implications. This is where there is a period of price instability caused by the interaction between the buyers and sellers. The investors as a group have not come to a decision on the direction the stock is to take. What usually happens is the price peaks out from within the pattern and then drifts about around the same price region or in a mild downtrend at which it can dump. This broadening pattern took it back to its trendline which it resumed. This is why it is important to pay attention to "old" trendlines. Toward the tail end of this broadening price pattern, the stock's volumes rose to a cresendo where it dropped off to nothing as the price hit its original trendline. During this cycle up and down, volume appeared to be validating both the price move up and the price move down. Then the price bounced off of its lower trenline under increasing volume, retreated, and bouned again sending it up under increasing volume to break out of its upper trendline. Boy, the speculators are playing with this stock! Take note of the OBV and Accum/Dist indicators. The Accum/Dist line indicates a net inflow of money during the broadening pattern. However, this is misleadning. The OBV during this time was decreasing which was in this particular case is IMO a more accurate measure of accumulation.and distribution for this stock. As a side note, the PVT remained level if not decreasing during most of this consolidation pattern until it took a dip right toward the tail end of this pattern. So beware of what large price swings within wide consolidation patterns can do to some of the stock's indicators. Even volume trend itself if not placed in the proper conext can be misleading in this type of situation. Any comments? Bob Graham

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