Working Money magazine.  The investors' magazine. Advantage



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



Rambus Ready To Rumble

10/27/04 11:05:07 AM
by Arthur Hill

Rambus shows good buying pressure and looks poised to confirm an important reversal pattern.

Security:   RMBS
Position:   Buy

Looking at the weekly chart of Rambus (RMBS) for some perspective, we can see a large advance followed by a falling price channel. The stock returned all the way to support from the February/March (2003) lows and then bounced with a sharp advance in September. The advance broke above the upper trendline and the 2004 downtrend is showing signs of a reversal.

Figure 1: Rambus weekly chart

Turning to the daily chart, the stock broke falling wedge resistance with a sharp advance to around 18. This breakout signals a continuation of the September move and projects an advance above the July high. This is quite important, because a move above the July high would trigger an even more bullish pattern.

Figure 2: Rambus daily chart
Graphic provided by: MetaStock.
Graphic provided by: Reuters Data.
An inverse head-and-shoulders pattern formed over the last five months. The left shoulder formed in July, the head in early September, and the right shoulder in mid-October. These are bullish reversal patterns that are confirmed with a move above neckline resistance. Instead of drawing the neckline with a signal line, I opted for a neckline resistance zone (17.45 to 18.25). This will ensure that a breakout exceeds the July high.

Volume expanded as the stock advanced in September and October (gray arrows). This shows that buying interest is increasing and further validates the pattern. A move above 18.25 would fully confirm the inverse head-and-shoulders formation and project a move to around 24.

Arthur Hill

Arthur Hill is currently editor of, a website specializing in trading strategies, sector/industry specific breadth stats and overall technical analysis. He passed the Society of Technical Analysts (STA London) diploma exam with distinction is a Certified Financial Technician (CFTe). Prior to TD Trader, he was the Chief Technical Analyst for and the main contributor to the ChartSchool.

Title: Editor
Address: Willem Geetsstraat 17
Mechelen, B2800
Phone # for sales: 3215345465
E-mail address:

Traders' Resource Links has not added any product or service information to TRADERS' RESOURCE.

Click here for more information about our publications!

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


Date: 10/28/04Rank: 4Comment: 

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.