The Importance of Base Patterns?
In todays volatile market everybody wants to know if the market will continue to rally or if it will consolidate and pullback and, if so, will it retest the lows? My answer to these questions is: Its still in doubt. However, Im more concerned with individual patterns than the general market. As a technician I certainly try to analyze and anticipate the market moves, but I am most concerned, when it comes to intermediate-term holdings, with individual chart patterns. Especially at a time when the market is as volatile as it is and being whipsawed by news headlines, I look for individual stocks that have promising patterns, stocks that have the best chance of weathering a market sell-off and having strong up-moves when the market turns up. How do I find them? I look for charts first and foremost with long base patterns (using weekly and monthly time intervals), stocks that have dropped significantly but that have had six months to as much as two years to level off. Its the old adage: You
