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Technology Stocks : PairGain Technologies -- Ignore unavailable to you. Want to Upgrade?

To: Rainmaker who wrote (34802)	11/21/1999 3:28:00 PM
From: Doug R	Read Replies (1) \| Respond to of 36349

Rainmaker, With respect to the IL/ACT/RR model, PAIR has one remaining condition to meet. Namely the break over the IL. It's purely a charting technique with no technical criteria (ie MAs, MACD, stochastics, RSI, regression stuff, momentum factors, etc). The focus of the model is on the use of specific trendlines as they determine the intrinsic supply/demand dynamic for PAIR relative to the human tendencies toward greed and fear. There are limits to how far greed will carry demand and the IL is useful in descibing that limit on individual stocks. The IL for PAIR is drawn from the low on 9/2/99 across the high on 9/29. The value for it on 11/26 is 24 13/16. To determine a timeframe for probable IL violation I use my own experience with TA. The technical profile of PAIR allows for a move that could take it over the IL by Wednesday or Thursday this week. The 11/19 jump did not elicit any confirmable buy signals on a large majority of indicators I use but it did set them all up for that. In light of this, I would expect that a move up on Monday will trigger these indicators and 1 to 3 days of follow-through will run the price over the IL. In reviewing PAIR's chart back in 1995 and 1996 I found that it had a very long battle with the IL/ACT/RR model. The stock at that time proved to be extremely stubborn about paying attention to its IL violation. It would break over the IL (which originated on 4/21/95)...pull back some and break over it again at a higher price. It did this for nearly a year before finally returning to the ACT (established during the last 2 weeks of June 1995) at 14 5/8 in 1997. The % drop from price peak to ACT was 66%. This was followed by an RR to 31 1/4...a bounce of 53%...somewhat shy of what the model would predict. As far as my experience with the model goes, that was an extremely unusual case insofar as the length of time the whole process took. It just may turn out that PAIR will do something similar this time around. The usual time frame for the IL/ACT/RR sequence to be completed is about 3 months. A recent typical example is GTNR which, on 11/11/99 broke over an IL that originated on 8/12/99. The IL was "activated" by price activity seen from 9/28 to 9/30. Time to IL violation from activation was 6 weeks. It's returning to the ACT more quickly than most instances though. The drop to the ACT will be a % move of 39%. Expected RR from the ACT is a move back up to 15 1/8. GTNR's movement over the last few months and the next week or so will be good for getting a perspective on what may be in store for PAIR. Remember though, there's still one more condition for PAIR to meet. Doug R