back start next


[start] [1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [12] [13] [14] [15] [16] [17] [18] [19] [20] [21] [22] [23] [24] [25] [26] [27] [28] [29] [30] [31] [32] [33] [34] [35] [36] [37] [38] [39] [40] [41] [42] [43] [44] [45] [46] [47] [48] [49] [50] [51] [52] [53] [54] [55] [56] [57] [58] [59] [60] [61] [62] [63] [64] [65] [66] [67] [68] [69] [70] [71] [72] [ 73 ] [74] [75] [76] [77] [78] [79] [80] [81] [82] [83] [84] [85] [86] [87] [88] [89] [90] [91] [92] [93] [94] [95]


73

Uoluie

RAMBUS (RMBS): DAILY BEARISH THREE DHVES

liilil!

[ill

flar

fipr

In this situation, I would not have been surprised to see the stock rally through the 1.27 projection and top slightly above 110. Sometimes, stocks will reverse off nice, round numbers such as 100, 110, etc. Rambus did almost hit 110 exactly, as the stock topped out at 109 15/16. The stock sold



off sharply in the following few days, confirming a new downtrend. Within the following few months, the stock was almost cut in half!

The stock did show clear reversal signs at the 1.27 projection, as is illustrated in the following enlarged chart. After the pattem was complete, the price bars tumed very bearish. Also, the stock gapped down in the next several days after completing the reversal.

RAMBUS (RMBS): DAILY BEARISH THREE DRIVES

Volume

SBi«Charts.coiii

illiilllliiliiliililii. .i.iiliii

20 24 27 Dec 3 7 9 U 15 17 21 23 23 30 99 6 3 12 14 19 21 25 27 2 3

Such bearish price pattems following a powerftil signal like the bearish Three Drives indicate that a serious reversal at hand. It is important to study this example because it really demonstrates the dynamics ofthe pattem.



The next chart is a good example of an obvious pattem. Intemet America formed a clear Three Drives pattem on this hourly chart. I included this chart because it represents the character of the pattem. The three price thrusts clearly stick out.

0bigcharts.com

INTERNET AMERICA (GEEIO: HOURLY

BEARISH THREE DRIVES

1.1.1,11 ill.ii I

600 400 200

D

D 0 £

Although the third drive was a bit extended past the 1.618 projection and the price bar exhibited a waming sign of a price gap, this example clearly illustrates the basic syrmnetry that the pattem should possess. It is important to note that if you waited one price bar, the price action was indicating a reversal, especially since the following price bar showed a bearish formation after the pattem was complete.



[start] [1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [12] [13] [14] [15] [16] [17] [18] [19] [20] [21] [22] [23] [24] [25] [26] [27] [28] [29] [30] [31] [32] [33] [34] [35] [36] [37] [38] [39] [40] [41] [42] [43] [44] [45] [46] [47] [48] [49] [50] [51] [52] [53] [54] [55] [56] [57] [58] [59] [60] [61] [62] [63] [64] [65] [66] [67] [68] [69] [70] [71] [72] [ 73 ] [74] [75] [76] [77] [78] [79] [80] [81] [82] [83] [84] [85] [86] [87] [88] [89] [90] [91] [92] [93] [94] [95]