Working Money magazine.  The investors' magazine. Advantage



Article Archive | Search | Subscribe/Renew | Login | Free Trial | Forgot ID?



Sycamore Networks Has Seen the Light

07/14/03 10:27:07 AM
by Andrew Hetherington

Like so many other stocks, Sycamore Networks (SCMR) has bottomed out. A 7-month bottom reversal-ascending triangle has formed on their daily chart with perfect volume on the creation of the pattern.

Security:   SCMR
Position:   N/A

Figure 1: Daily chart of Sycamore Networks.

Sycamore's breakout came in May through the resistance in the $3.45 area. There was the customary throwback to the buy point along the support at $3.45 and this was the best time to take a long position. If an opportunity presents itself and this equity comes off of its recent high of $4.80 down towards the support line of $3.45, it will be an excellent medium to long-term hold. The all-time low on this equity is $2.20 touched back in September of 2002, and we aren't that far off of the bottom to take a risk if we see a throwback.

The increased volume on this rally since the breakout illustrates the underlying strength of this equity. The volumes are steadily increasing accompanied with higher highs in price. This is a signal technicians like to see. It takes money to move equities higher but they can fall on their own weight. Investors sell for a variety of reasons but they all buy for the same reason-- the potential of higher prices.

Figure 2: Weekly chart of Sycamore Networks.
Graphic provided by: SuperCharts.
Looking at the bigger picture I see a rounding bottom or rounding turn. The price movement and the volume have the same concave shape. Of course, I can't anticipate this equity to go back as high as it once was, however, higher prices compared to the bottom are likely. Down the road a price of $6.25 medium-term and much later $12.00 is a possibility.

Andrew Hetherington

Classic Dow Theorist who trades as a pure technician, using pattern recognition.

Toronto, Canada

Click here for more information about our publications!

Comments or Questions? Article Usefulness
5 (most useful)
1 (least useful)


Date: 07/15/03Rank: 5Comment: 
Date: 07/15/03Rank: 4Comment: 
Date: 07/15/03Rank: 5Comment: 

S&C Subscription/Renewal

Request Information From Our Sponsors 

DEPARTMENTS: Advertising | Editorial | Circulation | Contact Us | BY PHONE: (206) 938-0570

PTSK — The Professional Traders' Starter Kit
Home — S&C Magazine | Working Money Magazine | Advantage | Online Store | Traders’ Resource
Add a Product to Traders’ Resource | Message Boards | Subscribe/Renew | Free Trial Issue | Article Code | Search

Copyright © 1982–2021 Technical Analysis, Inc. All rights reserved. Read our disclaimer & privacy statement.