Breakaway Gap Boosts Rockwell
As its daily chart shows, Rockwell International
(ROK) has a enjoyed a strong bull move off of its 52-week low of 27 11/16, set
in mid-September of last year. The “thrust” behind the move was the
breakaway gap (A) in late October, 1999.
The runaway, or breakaway gap was easily
identified as such — it filled the down gap from mid-September, and itself
remained unfilled, with prices finding support at about $36. Prices then
began a another leg up to the $44 range.
Each “leg” of the up-gap measured
roughly one-half of the approximate 17-point gain from mid-September through
mid-December — another characteristic of a breakaway
gap.
Prices found support in the $39 range (B),
then surged again to a high of 48 5/8 on December 29. An extended flag has since
formed (C), presenting a good buying opportunity.
I’ll be waiting for an upside breakout from the
flag. I’ll get especially excited if I see volume surging on such a breakout.
See you Thursday,
Eddie