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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: Caxton Rhodes who wrote (113229)	2/13/2002 11:20:06 PM
From: Robin Plunder	Read Replies (1) \| Respond to of 152472

Caxton, here are some comments on double bottoms from Edwards and Magee, 8th edition, p134 ff: "True double tops and double bottoms are exceedingly rare....the true patterns can seldom be positively detected until prices have gone quite a long way away from them. They can never be foretold or identified as soon as they occur, from the chart data alone." I wonder why they are so rare? Is it because they only occur at major reversal points, and major reversal points are rare, and can be signalled by other chart formations besides a double top or bottom? It seems that these formations cannot be identified until after they occur because, as you note, we need to see a break of the prior peak at 62 (for qcom) before we could identify the recent low as part of a double bottom. Although for qcom, perhaps the break of the declining trendline at the low 50's would also be a good signal, since if we broke thru there, we would likely move quickly up to the low 60's. Some criteria they list for a double bottom: the pattern takes time to evolve, several months usually rather than several weeks. The pattern has dull rounded shapes rather than sharp moves. The price change is usually 20% or more from peak to trough. The second low often exceeds the first low by a few percent. ...So far we meet the criteria. Volume should increase as the stock rallies from the second low, we have not seen this yet. Here's hoping for a good rally....'bottoms up'....:) Robin

To: Caxton Rhodes who wrote (113229)	2/13/2002 11:29:58 PM
From: Robin Plunder	Respond to of 152472

Caxton, I notice that QCOM has the honor of being included in Edwards and Magee under the section 'key reversal days' (p179). They have the chart from 1999 thru 2000, with the following comments: "A church spire top in qcom. The December gap might be mistaken for a buy signal, as might be the runaway days, but they are actually hand-engraved invitations to leave the party with near progressive stops .125 points off the day's low. Also valid - exit on the key reversal on day 2 after the gap. How does the trader know this is a blow-off and not a signal to pyramid? By the age, length, state, and slope of the market. When trendlines go vertical, blow-off management must be used. The return to the base of the first runaway day is notification that it is a bull trap. The first bull trap. The second bull trap is the breakout of the triangle in March. A wonderful chart filled with fin de siecle and fin de millenium lessons." Hmmm...I guess we did not need them to explain that, I always figured it would have a big drop, but was willing to hold on for a likely recovery. I never thought we would see the 30's again, though. Perhaps they can add the chart to their 'double bottom' section in a later edition....:) Robin