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Technology Stocks : The New QLogic (ANCR)
QLGC 16.070.0%Aug 24 5:00 PM EST
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To: Craig Stevenson who wrote (10698)10/3/1997 11:59:00 AM
From: craig crawford   of 29386
 
Craig S,

A cup with handle formation looks like the outline of a cup when viewed from the side. The formation usually lasts from 3-6 months but can last longer than a year.
The bottom part of the cup should look like a "U" rather than a "V". This is significant because it shows a longer and more drawn out correction near the bottom that scares off speculators and "weak" hands. What is left is a solid foundation of "strong" hands who are less inclined to sell following the ensuing advance.

--The handle should form in the upper half of the structure, and should occur above the 200 DMA. (ANCR has done both).

--The handle should also have a slight downward drift to it. Near the end of this downdrift there should be a shakeout with low volume price declines. This eliminates more weak holders before the subsequent breakout.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
I believe that is where we are right now. Near the end of the handle in this formation. A disciplined trader (shame on me!) would not try to get the best (i.e. lowest) price and should wait for the breakout. The breakout should occur at 13 with AT LEAST a 50% increase in volume but more likely 100% or more. (I'll be looking for 300,000 shares or more).

That's when it will be time to buy ANCR. ANCR will be less risky at 13 with 300K volume than it is here at 9 3/4.
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