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CHART ANALYSIS


Check Point Software (CHKP) Is Repeating Patterns

10/21/03 09:22:07 AM
by Andrew Hetherington

This may take some time to reach but anticipating a strong move is reasonable given the multiple, near perfect pattern forming for Check Point Software.

Security:   CHKP
Position:   N/A


Figure 1: Daily chart of CHKP.

The daily chart shows a consolidation 5-month symmetrical triangle that, when complete, will likely be a 6- to 7-month triangle. The volume on the pattern is close to perfect and is currently approaching the bottom trendline where it will be the optimum buy point for a long position. Naturally, the pattern is still forming and a word of caution is necessary. However, this is an opportunity off of the bottom line with very limited downside. If the bottom line is breached or broken and the equity goes below $16.50 then it would be prudent to sell your long position. If the $16.80 line holds strong and ricochets off to higher levels then you will be in a safe, profitable position for some time to come. I've suggested a stop-loss of $16.50 to give the equity some breathing room on the way down. A buy point anywhere in the $17.00 - $17.90 range is acceptable. The anticipated breakout will occur at the $19.50 trendline.

Figure 2: Weekly chart of CHKP.
Graphic provided by: SuperCharts.
 
The weekly chart shows another bottom reversal symmetrical triangle that is 10 months in duration. This slightly larger triangle has near perfect volume as well. This is where the push upwards is originating. The long-term trend was broken on increased volume in April of 2003, then it consolidated forming another triangle and it looks ready to move higher soon. The anticipated resistance lines are $22.00, $26.00, and eventually $38.00.



Andrew Hetherington

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

Toronto, Canada

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Date: 10/25/03Rank: 5Comment: 
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