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Strategies & Market Trends : Trend Setters and Range Riders -- Ignore unavailable to you. Want to Upgrade?

To: Susan G who wrote (5352)	5/24/2001 1:49:20 AM
From: kha vu	Respond to of 5732

BKHM: any one checks it out ftmarketwatch.com{EB5C974C-0758-47C1-83AA-EF16A06AD86C} ftmarketwatch.com <<<Chart focus: Bookham breaks out Two-month consolidation ends with 20% move up By Vince Heaney, FTMarketWatch 10:50:00 AM BST May 23, 2001 LONDON (FTMW) - Everyone knows what happens when you compress a spring and then let go - you get a bounce. When one of London's most popular and volatile tech stocks sees its share price confined to an ever more compressed range for a couple of months the stage is set for something similar. Go to an interactive chart for Bookham Technology [UK:BHM] [US:BKHM] with 10, 20 and 30-day moving averages and a relative strength indicator (RSI) added. Bookham's share price rise and fall is a stark illustration of the bursting of the tech bubble. From a high above £54 last July the former tech darling saw its shares reach a low of 222 pence this April. After Bookham's plummet from favour, the shares entered a period of consolidation over the past two months. Looking at the moving average envelope gives the clearest indication of this process. The moving average band, which was clearly showing a downtrend in February and March, flattened out and became ever more compressed during May, as the share price became confined to a tighter and tighter daily range. This process was mirrored by the RSI, which closely tracked the neutral 50 level. This is a chart pattern that is it worth watching out for, particularly in a stock that can exhibit considerable momentum such as Bookham. Just like the compressed spring, you know shares aren't going to stay flat forever. On Tuesday Bookham broke boldly out of the compressed range, opening above the most recent high at 380 pence and rising 16.7 percent on the day. Bookham has added a further 4.4 percent on Wednesday. Bookham is now trading well above all three of the moving averages and the RSI has broken higher away from the 50 level. From a chart perspective short-term pullbacks are now a buying opportunity. Vince Heaney covers markets for FTMarketWatch in London. >>>>>>>>