Oclaro, Inc. (Avanex-Bookham) Message Board

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Technology Stocks : Oclaro, Inc. (Avanex-Bookham)

OCLR 8.260

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Dec 10 4:00 PM EST

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To: Hawkmoon who wrote (2177)	4/10/2006 9:37:04 AM
From: Hawkmoon	of 2293

Another interesting post from Yahoo: finance.messages.yahoo.com I read this whole thread; here's my take. Actually, der_blarty and I were discussing this last night. The pattern setting up in the AVNX chart is very interesting. stockcharts.com The cup & handle is pretty easy to see; reset the chart size to "landscape" and the time to "2 years" to see the whole thing. But in the link above, you can see that the handle now has turned into a cup, with a handle of its own! And the intraday chart today almost traced out another handle at the end of all that. der_blarty voiced my exact thought, which is that it has a very fractal sort of thing going on. And this "fractal handle" is definately an ascending triangle. Where I disagree with radiantglobe is in setting the breakout level of the ascending triangle at $3.50. You can clearly see the failures at the $3.31 - $3.33 level; incidentally, subdollar identified $3.33 as his immediate value target for the warrants issued in conjunction with the recent secondary (you'll have to ask him about his rationale). What it looks like to me is this: the main pattern is the cup and handle. The handle is developing into this unusual fractal-style series of smaller and smaller cups that's also tracing out an ascending triangle with a resistance/breakout point of $3.33. But the breakout level of the main pattern remains at $3.50. A solid breakout above $3.33 releases the stock from the triangle and allows it to move up to complete the main handle, and a solid breakout over $3.50 brings the upside target of $6.38 into play. Using the link above, look at the chart of LVLT, which broke out a couple weeks ago. You can also see a handle that was completing with multiple swings prior to that breakout, but it's not nearly as elegant as the AVNX chart; there was no ascending triangle in that one. Do you see what happened when it broke out? The trading action in AVNX since March 16th has had the effect of coiling a spring very, very tightly. A strong move over $3.50 releases that spring. Where it stops is anyone's guess, but the move should be fast and furious when it happens. Anybody who is shorting in any size for more than a daytrade-type "scalp" is going to quite literally be put out of the trading business when this one breaks out. Anybody who has been long since the $1 range (as Mr. Subdollar has done with his core AVNX holding) is going to think their brokerage account balance screen is a Vegas slot machine that just hit trip-sevens. Now whether the move over $3.33 immediately vaults us over $3.50 and on up is anyone's guess. The way this chart is setting up, the energy being stored up in the pattern looks pretty intense. The breakout is definately going to be a lot of fun to watch!

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