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CHART ANALYSIS


Manhattan Associates Has Broken Out

09/08/03 10:41:06 AM
by Andrew Hetherington

Watch to take a long position in this stock on the strength of a near-perfect ascending triangle.

Security:   MANH
Position:   N/A


Figure 1: Manhattan Associates' daily chart.

The daily chart shows a perfect 3-month ascending triangle. The volume is slowly diminished from left to right as required. There is a strong breakout on increased volume two thirds of the way through the creation of the pattern. This pattern is as close to perfect as you will ever see. My only reservation is that it is only a small 3-month pattern. My preference is for larger patterns because they tend to have more power but smaller ones are still significant. The third fan line or as I call it, my performance line, is still intact. After a brief throwback to the line in the $30.75 area it will resume upwards. The $30.75 area will be the optimum buy in point to take a long position since it will also be near the performance line.

The performance line slopes upwards and can be used as a guide to optimize your profits or to have a stop-loss. Place your stop-loss just under the performance line by a point or slightly more. After taking a long position use this line to stay in for the entire ride up. If this line breaks it will be time to lock in profits.

Figure 2: Manhattan Associates' weekly chart.
Graphic provided by: SuperCharts.
 
On the weekly chart a small triangle has formed within a much larger congestion area that looks like a large ascending triangle. The volume in this area is not diminished enough to clearly define it as a triangle, however the triangle does exist somewhat. The next resistance is in the $39.00 area and I expect a hesitation when it reaches this point.



Andrew Hetherington

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

Toronto, Canada

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Date: 09/27/03Rank: 4Comment: 
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