Constructive Action Within A Base
From time to time you’ll see a
breakout from a small pattern which doesn’t put much of a dent in a large
pattern that surrounds the smaller pattern. The short-term trader may see an
immediate opportunity, while the intermediate-term trader continues to stay on
the sidelines.
Commerce One’s
(
CRMC |
Quote |
Chart |
News |
PowerRating) action on Wednesday is a good
example of this.
CMRC broke out from an ascending triangle on 300% average
volume. This action also helped CMRC to pull away from potential low-level head
and shoulders top. Interesting for the short-term
trader looking to ride a move to the early-July highs.
For the intermediate-term trader, today’s action
is constructive and qualifies CMRC for watch-list membership. But. . .it’s
still locked in a five-month base and has the potential to continue moving
sideways within it for awhile. An intermediate-term
trader will be tallying up the accumulation days, but likely be
staying on the sidelines–unless he/she is skilled in the art of
“cheating.”
See you tomorrow,
Eddie
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