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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (39547)	5/23/2003 9:39:32 PM
From: j g cordes	Respond to of 69822

Thats interessting Harry..

To: Johnny Canuck who wrote (39547)	5/27/2003 11:13:31 PM
From: Johnny Canuck	Read Replies (1) \| Respond to of 69822

Demand Solid Price And Volume Action When A Stock Breaks Out Tuesday May 27, 10:07 am ET By Craig Shaw In the past two weeks, this column has reviewed the nuts and bolts of the chart patterns that propel stocks to great gains. But perhaps the most important aspect of a base is its finishing touch. When a stock breaks out, you want every factor - price, volume, industry group, market - working in its favor. If one of these elements is lacking, the breakout may fail. The first thing to check is price action. The stock should surge convincingly past its pivot point, the last point of resistance blocking an unfettered run-up. In a cup-with-handle base, the pivot is the high of the handle plus 10 cents. In a double-bottom, it's the middle peak of the W plus 0.10. In a cup-without-handle, it's usually the base's left peak plus 0.10. You want the stock's Relative Strength line, which charts its progress vs. the benchmark S&P 500, to hit new highs in tandem with the breakout - or, better yet, before it. This shows the stock is outperforming the general market. Volume should also be on your side. For a large-cap stock, trade should swell to at least 50% above its daily average. Small caps can double or triple their typical volume on the breakout. This surge shows that institutional investors stand strongly behind the stock's rise. Once the stock clears its pivot, you want to see signs of support. Some big winners race ahead 20% in a week or two. But others dip back near their pivot for a breather before taking off. That's OK as long as the stock doesn't fall more than 7%-8% below your buy point. You also want to see volume dry up on a pullback. This shows institutions aren't itching to sell right away. Support at moving averages is another key. As the stock rises, watch to see that up days in price feature heavier volume than down ones. Closes at the top of the stock's daily or weekly range boost confidence. So do consolidation phases that let the stock digest its gains in a tidy manner. EBay busted free of a 13-month base Jan. 6 to become one of the new rally's strongest big caps. Notice how volume dried up during the stock's six-week handle (Point 1). The leading online auctioneer and retailer then blew past its pivot point, rising 3.07 to 73 on the heaviest weekly trade in nearly three months (Point2). Its pivot was 70.95, or the high of its handle plus 0.10. It dipped below that point only once after breaking out, to 70.70 during intraday trade on Jan. 16. But it closed at 71.25, above the pivot. In the next session, eBay rebounded on heavier trade. EBay retreated to its 50-day moving average six weeks after breaking out, but never violated that key support line (Point 3). Trade stayed light during that consolidation phase despite the market's pullback in February and early March. Then volume surged again as eBay scored a 12% run over two weeks through March 21 (Point 4). It closed Friday 40% above its pivot point.