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Strategies & Market Trends : Chart Formations -- Ignore unavailable to you. Want to Upgrade?

To: sean sanders who wrote (189)	7/15/1999 7:57:00 AM
From: Casaubon	Respond to of 967

what gave me confidence about the VRTX reversal (not that it has to stick)? There was a desperation purge at the bottom, followed by a narrow channel with lower than usual volatilty, followed by the "spring". This gave me confidence that the stock was at least going to bounce to the top of the channel (whereever the top of the channel is...but I'm inclined to believe it's around $27, so we're close). What causes breaks to the upside, you might ask? IMO, it is unexpected increases in earnings or the expectation of imminent increases in earnings. So, I'm not sure how you get a program to recognize all the factors which increase the confidence level high enough to take action. Factors: 1) End of downtrend candle (ie high volume hammer purge) 2) bottom formation (possibly characterized by a period of low volatility. 3) A spring (on 125+% local volume) to signal an imminent bounce to the top of the channel, at minimum.