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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Shack who wrote (62775)	11/18/2000 12:27:26 PM
From: eichler	Respond to of 99985

Shack, I think that it is important to use chart patterns in conjunction with other T.A. to come up with a complete, more correct picture. Looking at the daily chart, ignoring pattern features, one can see that rimm has been on quite a roller coaster the last year. In the last couple months, there was a final upwards breakout begun 9/25, confirmed by increasing volume. But after 9/29, it is also obvious the run up after that was on decreasing volume - a key clue. Also, 10/24 we see a decline beginning on increasing volume, a very bad sign (or good if you're short!). A series of lower highs and lows (10/30,11/8,11/13) indicate a downtrend in progress. A look at the action from May to present gives the impression of a stock that hasn't taken all of its medicine due from this bear market. 62% retrace from May low to Oct high yields a projected target around $65. While I would not rule out a bear-rally to the current downtrend line currently allowing a potential short term high around 107, I personally would be too chicken to play this one from the long side. If I were trying to play this one, I think the correct strategy would be shorting resistance on rallies, taking profits at fib support levels with an eventual downside target under $70. The current max-pain for Dec on rimm is 80.00 so I would expect a fluctuation range above and below that level. At viwes.com, I see the stock has plenty of short interest although due to heavy volume of late, the ratio has decreased in spite of an increasing trend of shares short. In summary, I think chart patterns are valuable tools but must be taken into consideration with other tools for a more complete picture. Playing a pattern only can be very dangerous to one's portfolio! Good luck, Regards, Eichler