THQ,Inc. (THQI) Message Board

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Technology Stocks : THQ,Inc. (THQI)

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To: Sigmund who wrote (3302)	2/6/1998 2:59:00 PM
From: Ron Kline	Read Replies (1) of 14266

The question you ask about the difference in cup formations and a double top are interesting. You will indeed find double tops that will look like cups and it can be difficult to interpret the differences. One of the things I look for is pattern of the cup. Many double tops are formed by more V shaped cups where there is little time for the necessary accumulation that happens at the bottom. Also things to look at are if the action is wide and loose, meaning the price tends to be erratic and does not conform to a uniform chart. A non faulty cup should be pretty tight in the accumulation area closing close to unchanged all with low volume. Another thing you want is enough time for the accumulation to take place. You want at least 6 weeks for the cup to form. I think in THQ's case it violated this but I believe it was due to the market action we have had and should not be a problem. One thing you will notice on double top is at the high point of the second top you will notice heavy distribution on that day, and the volume will tend to be high with the stock closing unchanged. Usually when the top fails you can see that the sell off tends to be very swift with high volume. A handle on the other hand should have pretty light volume especially near the low of the handle. The handle should hold between 10-15% from the top of the cup. Here is an example of AMAT on it's double top. It looks a little like a cup but is faulty with volume turning heavy at the top. iqc.com Here is an example of a stock I own THRX. Notice the handle was strong on the downside but the volume was not heavy. But once the stock took off at the handle it became quite heavy. You need to look carefully at each days on the chart with the volume below to understand where the volume started. iqc.com Hope this helps a little. THQ has been going down since the top but the volume is pretty low. It seems to be holding well. Ron

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