To: TheSlowLane who wrote (6343 ) 1/6/2007 12:26:34 PM From: insitusands Respond to <...breakaway gaps and those are the ones that usually do NOT get filled if the fundamentals justify it. Discovering many millions of ounces of gold is a very good reason for a company to deserve an immediate fundamental re-valuation.> Very good point. If people were to view charts as simply a graphical representation of the "fundamentals" as "perceived" by the market there would be less resistance to them. For example, Cameco was in a constant downtrend from '96 to 2000. Why? Well, obviously either the company had a problem or the uranium sector had a problem (weak U308 prices or whatever). Now if you fought that trend because you were convinced that U308 was going to go higher for the reasons it is now you would have been both right and out a lot of money. From its low CCO rallies for two years into March '02. It then underwent a rough six month correction, giving back almost two thirds of its gain. Why? When a stock rallies against a long downtrend it almost always has a meaningful correction since people who bought it on the way down often cannot wait to get their money back so they sell as soon as they do. This phenomenon is known as resistance and resistance is not voodoo, it is simply an expression of human nature. In CCO's case however, the fundamentals overcame this resistance and the stock broke out into new highs 13 months later. You'll notice that once CCO breaks out or makes higher highs (a better term, "breakout" is far to subjective) in Oct.'03, the stock rockets. Why? Because all the big players know for sure that CCO is in a new uptrend and they pile in. I can assure the board that the fundamentals did not change
