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Hi All: Many of us have followed/owned this one (I'm in the former group having missed prior valid buy points). I appreciate Tom's great work on this stock and am interested in any and all opinions re: current base count. Above is my marked up WEEKLY chart which differs from Greg's base count in May/June. Greg may well be correct and I would prefer his outcome to mine. As you see,my count puts the current deep cup formation as a fourth stage base as no prior undercutting (by my count) has occurred. This current CRX (so far) missed undercutting what I'm calling a third stage square box (15% crx so somewhat deep for a flat base) by $0.96. As the massive sellout began the week of 5/6, I had hoped we would reset. Tell me were I'm wrong and give me a new first stage base on this stock with such a potentially bright future! Brad
On an entirely different point of view: PAYs' downtrend overlays the second quarter with a reversal starting with the approaching 3rd quarter. This turnaround is earnings driven and IMO should continue unless market conditions or bad news interferes (which is also likely).
Also, passing the current resistance of the 50 dma should add an increase in volume.
I don't really see the 3rd base as a valid pattern. I think we can quickly rule out a flat base. There just is no 5-wk stretch when it did not make a new weekly closing high. As for the square box base.
The first pullback (PB) on 12/10 you had a new weekly closing high, you had 3 down weeks (12/17, 12/24, 12/31), the 4th week (1/7) you had a new closing high. Clearly, this one is too short and is confirmed so on the daily chart.
On 1/14 you had a new weekly closing high, with a repeat of the last PB, 3 weeks down (1/21, 1/28, 2/4), the 4th week (2/11) you had a new intra-week and new closing high. Although this PB did come back to the MA. This pullback is one day short. If the breakout occured the following Monday, it would have allowed for the week of 2/11 to count as the 4th wk in the SQ Box base.
A better base pattern is an ascending base, starting with the new high on 11/05, you have three waves. The first starts on 11/05, the 2nd start on 1/14 and the 3rd starts on 2/18. The PB that starts on 12/10 doesn't correct enough to be considered a wave, it is merely a pause in the uptrend to the 2nd wave. It is 14 wks in duration and a BP of 50.01. Each wave, makes higher highs and higher highs. It breaks out on 3/8 on 52% higher volume, retests it's BP, correcting 7.5% before making a 17% run.
The ascending base would be a 3rd stage base with a base low of 31.39.
The current period of consolidation has only corrected 33.7% to a low of 39.00. Not enough for a base reset. Making the current base a 4th stage base.
The Villages Meetup
Thank you bjrad for the kind comments. I think all should know that there are few competitors that have the security and patent rights that PAY has. I'm only aware of two competitors, Hand Held products that is privately owned, located in Skaneatles NY and Igenios, I believe is the name. I have been waiting for IBD to do an in depth research article on this company and hope that they do so, sometime soon.
Now let's get to the chart. Is this company over, I highly doubt it. While I do not own it currently, I suspect that I will in the future. I still believe that this company will change the way we live.
It would be my hope that we're paying signifcant viewing attention to some of these charts. While I do realize that we cannot do for for 6 or 8 thousand, I'd like to think that for the real winners, we'd devote this time.
If so, I hope you noticed what occured the week of 3/12/10. Now look forward.
I view the counting of bases as one of many components of overall extension rather than something definitive. I have heard W. O'Neil Sr. say "You've got no business with a 3rd stage base." But I think that varies with overall RS and EPS strength. BIDU had a lot of success off of it's 3rd and 4th stage base. We are at either base 5 or 6 on BIDU. It doesn't really matter if it is 5 or 6, the great stock is very extended and this late stage base has corrected more than 25% = very prone to failure.
Actually that's a misquote. "You've got no business with a 3rd stage base" is what I heard. The actual quote was in reference to a specific chart and it was "It's a 3rd stage base. You have no business with it." Two separate sentences with the first not necessarily determining the second. A subtle but important distinction that caused me to miss many successful 3rd stage base breakouts. Thiis is a game of subtleties.
To All: Thanks for all of the feedback and analysis. Tom I agree with you on the company's prospects and how we will all be paying at the checkout counter in the future. Rob, I greatly appreciate your in depth breakdown of the ascending base structure. I did not see, or even entertain, an ascending base pattern here. I marked up my daily chart with your #'s and absolutely agree. Good eye! Now that I look at the weekly chart the ascending pattern leaps out at me. Thanks. As I understand it, an ascending base should be a warning about future correction and are often associated with climax tops. As regards the math, my calculations show the third PB in the base only corrects 7.4% and that a PB w/i an asc. base pattern should be b/n 10-20%. Am I wrong here or am I nitpicking on the margins of the rules & definitions? Perhaps the current correction will deepen given the market's trend and we will get a base reset. I'd certainly feel comfortable buying as I don't think this company is going to disappear from our radar/lives. Brad
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