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Technology Stocks : All About Sun Microsystems

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To: JDN who wrote (11562)	11/5/1998 9:21:00 PM
From: Christopher	Read Replies (2) of 64865

JDN, I have read your memo in which you mentioned SUNW price of $53 which is the new support level for SUNW. You also mentioned the 2/3 retracement. See, you are not totally into FA if you know that much about charts. The only thing I would say is that if a stock in in the early stage of a bull market then its retracement are more likely to be a 1/3. If it is in its late stage of its bull market then retracement are more like 2/3. Because SUNW has formed an ascending triangle, you would more see flags and pennants as it moves to its new target. The retracement usually apply if a stock is in an uptrend and having created no technical picture at all like the triangle under discussion here. I have mentioned Coors Beer in a previous memo. Coors moved to its new target and created two flags on the way up as opposed to retracements. However, retracement to the new support line (like for SUNW it is $53) in not unusual when technical pictures are present and then the stock would move to its new target. These kind of retracement must happen on low volume(otherwise the move to the new target is a suspect) and usually offer a good opportunity to add to your position. Good trading. Christopher

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