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Technology Stocks : The New QLogic (ANCR)

QLGC 16.07

0.0%

Aug 24 5:00 PM EST

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To: Arthur who wrote (10785)	10/9/1997 7:54:00 AM
From: craig crawford	of 29386

<< Is there any rule on how long the handle part usually lasts compared to the cup part. >> In William J O'Neils book he says the handle should last at least one or two weeks. Mr. O'Neil also says that "cups without handles have higher failure rates although some stocks with smaller capitalizations advance without forming a handle". << Do you have any examples showing what a breakout typically looks like. >> Sure. I just experienced one yesterday. Of course to illustrate this example I will need to use a shameless plug to do so. Look at this chart of LPTHA (one of my favorites) quote.yahoo.com It formed a nice cup after it's run-up in Jan to it's trough down in Apr. It then formed a handle (notice the downard drift) into July on little volume. It broke out to 8 1/2. Then formed another little cup recently and just broke out on almost 7-10 times avg. volume yesterday (haven't calculated recently). Let me point out that the last breakout in July was accompanied by heavy volume as well. The reason why this chart is powerful is the cups were formed after a nice rise, not a serious decline. Unfortunately for ANCR the cup was preceded by a severe decline and the actual decline of the cup was steep (14 to 4) so it is less bullish. Even though ANCR's chart may look more like a cup because it was so deep you actually want a less severe "U", almost a saucer. Hope this helps. BTW, I am not a TA expert by any means. Most of this stuff I am just regurgitating from books I've read. Look out for LPTHA tomorrow...Or later this morning as the case may be.

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