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Technology Stocks : 3Com Corporation (COMS)
COMS 0.001600.0%Jan 9 9:30 AM EST
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To: 45bday who wrote (23479)10/29/1998 8:23:00 PM
From: Wayners  Read Replies (1) of 45548
 
Its a matter of judging how strong or weak a particular support or resistance level is or how strong or weak a particular trendline is. Steep uptrend lines provide the most support. Flat uptrend lines, i.e. a support level is weakest after a price run to a higher level and then the support level gets tested about the third time without the stock going higher--that is usually the time the support at the top breaks down. So looking at COMS here, it followed a steep uptrendline up to $35, with a few selloffs along the way. COMS is no longer in that steep upward channel. That's the first sign of weakness. It indicates that momentum is slowing. We've had one test of $35 1/2. I'd expect to get one more retest of $35. I think the next retest of $35 will be a false break and you'll see prices go slightly above $35 and then a pullback and retest of $32 1/2--and then a run to $34 and little above and then a retest and final failure of $32 1/2 for a retrace to that long term uptrendline at $27 to $28 over time. What I've just described above would be a head and shoulders topping formation at $35. How long will it take for all of this to happen? A few weeks. Of course if COMS comes out with some type of news or LU makes an acquisiton or something--all bets are off and COMS breaks through $35 for real. Without some real news or rumor to drive COMS higher thorugh $35--it isn't going to break on its own. The next earnings announcement runup will get COMS through $35 in my opinion--but that isn't going to happen until December.
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