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We've had so much debate this week about short-term vs. long-term, and about technicals vs. fundamentals that I want to warn you that this is a lengthy post, based strictly on the short-term.

In a play like XING, for example, I was  looking very closely at intraday charts, trying to determine if I wanted in it, and where I wanted in it, prior to the DOUBLE breakout that it just had.  Now that XING busted loose on the upside, I'm not even looking at an hourly chart on it, let alone a 10-minute chart, or a 1-minute chart.

So, you see the difference. 

I'm looking closely at intraday charts in HAUP, which sometimes are "just noise," as David says, to see if there's anything going on that is more than "just noise" at this juncture.

Okay, let's review the things that we were looking for, in an effort to determine whether or not we've got a Bearish Wolfe Wave/or a Bearish Channel playing out here, or not:

Quote from: David Randolph link=topic=8365.msg84549#msg84549
Moreover,  As for HAUP, when almost nobody expected and without any news, it broke out above the $8 resistance level. I have a 14% profit on the stock and I'll keep on holding.

You've hit on the very hallmark of a Bearish Wolfe Wave (sometimes seen in a Rising Channel, or a Rising Wedge, also), David, as I see it.

Almost nobody expects the breakout.  They've waited and waited, and when the breakout occurs, they buy and/or cover their short positions on the 8.01 breakout, and then the 8.25 channel breakout, and it turns out to be  exactly the wrong play.

That's the Wave 5 upside Fakeout/Breakout that we've discussed, which catches people by surprise, and it puts them "wrong-footed," when they buy or cover a short position on breakout, which "should be" bullish, but it's a Bull Trap.

I've gotten trapped on a few of those myself! 

Another thing that almost nobody expects, is for 8.00 to FAIL to become support on a re-test.  They've paid a premium price for the stock, above 8.00, and they expect to be rewarded for being patient, and for waiting for the breakout. 

"Former resistance 'should' become support on a pullback."

But, another indication of a "possible" Bearish Wolfe Wave (or false channel breakout) is that the 8.25 channel breakout and the 8.00 breakout isn't support.

Really good breakouts either don't come back at all to re-test the breakout (like XING...it broke out at 13.20 and again at 13.41 and it was gone on the upside), or they find support on a re-test, or darned close to it.

Quote from: Melf Elf on January 16, 2007, 12:32:52 PM
Short-term, HAUP is responding to the technical weakness, and broke below a Descending Triangle this morning, which has a QUADRUPLE top at 8.00.  That needs to get taken out to upside, obviously.

HAUP did take out 8.00 resistance, and went up and put in the Wave 5 "Fakeout Breakout."

Then, on the re-test of the 8.25 and the 8.00 breakouts...

Quote from: Melf Elf on January 17, 2007, 03:49:21 PM
The early morning Channel breakout got to a high of 8.47 at 10:00AM.  Support on the selloff was 8.06, which was fine.  That was above the tops of the Ascending Triangle, at 8.00...8.00...8.00...8.00.

But, 8.00 failed to hold as support the next session, and..

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The pattern break puts 7.43 IN PLAY as long as HAUP trades below the pattern, or until 8.00 is taken out.

...that target went ON HOLD when HAUP broke out above 8.00, but when HAUP went back below 8.00, and then went back below the pattern, the 7.43 target went back IN PLAY, and it got MADE on Friday.  The low was 7.30.

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The second rally attempt was lower to 8.43, then a selloff to 8.12.  HAUP is at 8.12 again, on a Symmetrical Triangle breakdown in the intraday chart.

Although, 8.00...8.00...8.00...8.00 had held as support at that point in the day,  (the intraday low was 8.06), that broken Symmetrical Triangle put a target of 7.74 IN PLAY, heading into the close (pattern in the chart below).

Math for The Symmetrical Triangle:

High: 8.47

Low: 8.06

8.47 - 8.06 = 0.41 points.

The breakdown occurred at 8.15 - 0.41 = Target: 7.74.

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1. The Wave 5 fakeout/breakout possibility that we've discussed, if it closes below 8.25, similar to what GIGM did in this morning's chart example from September.

The close was 8.10, back below the channel. 

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2. A Bearish Inverted Hangman in the daily chart. 

The close left a Bearish Inverted Hangman in the daily chart.  Intraday, the Bearish Hangman itself was a broken Symmetrical Triangle (broke at 8.15), indicating further downside.

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3. A Bearish reversal, if it closes in the red. 

It was a Bearish reversal, by closing in the red. 

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HAUP is at 8.12 again, on a Symmetrical Triangle breakdown in the intraday chart.

Although this all was just "short-term" stuff, it can be very helpful, when we're gathering information to determine where to enter or to exit a position.  That was a good bit a Bearish information in just that one session, if anyone wanted to "take the money" on the Symmetrical Triangle breakdown, at 8.15, late Wednesday afternoon.

Thursday morning's gap down opening (chart below) was confirmation of all of those short-term bearish factors.  The Symmetrical Triangle target of 7.74 MADE, and it "shouldn't have" because the breakouts above 8.00 and above the channel, at 8.25, were "supposed to be" bullish.

They weren't bullish, at least not short-term, when TWO bearish targets got MADE after the TWO "bullish" breakouts.

Yesterday, we examined some of the factors that indicated that the short-term trend had turned bearish, and the confirmation of that, which was the TWO Bearish short-term targets getting MADE.

Two things, in particular, that I would look for next week:

1. The "possible" H&S Top forming (best seen in a short-term chart, like this Hourly).

2. The MACD, which has put in a DOUBLE negative divergence.

In the daily chart, HAUP put in a Bullish Hammer, looking like it wants to make a rally attermpt, after 3 down closes in a row.

If HAUP rallies Monday, watch to see:

1. If it can get back above 8.00.  If it can, that would take out the high of the Left Shoulder, which would be a good sign.

2. If the 7.23 - 7.30 neckline of this "possible" neckline gets taken down after a failed rally attempt, or even after no rally attempt at all.

If the neckline gets broken, that would put "roughly" 6.15 IN PLAY.

Math for the "possible" H&S Top.

8.47 - High of the head

7.28 - That's roughly where the neckline was, when the 8.47 high got put in.

8.47 - 7.28 =  1.19 points.

We won't know where the neckline will be unless/until there's a breakdown, so let's say that the neckline gets broken at 7.34.

7.34 - 1.19 = Target: 6.15, approximately.

Next post, the MACD.

MACD has had a DOUBLE negative divergence at the top of The Bearish Wolfe Wave/Bearish Channel, and on Friday, after the Wave 5 Fakeout Breakout to 8.47, the MACD has crossed below its signal line, by just a hair.

If HAUP can manage to get back above 8.00, that not only would negate the H&S Top possiblity, the MACD would bang higher off its signal line, which also would look much better.

If HAUP acts weak, the MACD will continue continue down through its signal line, and that could bring in the technical sellers, and increase the likelihood of a breakdown of the H&S Top.

We'd really like to see HAUP back over 8.00, at least.

Good luck, everyone!

Quote from: Melf Elf on January 21, 2007, 07:11:34 AM
If the neckline gets broken, that would put "roughly" 6.15 IN PLAY.

If that should play out, and if that target would get MADE, that would roughly coincide with what the "possible" Bearish Wolfe Wave indicates. 

The target line (Blue #6), looks to come in at about 6.18 on Monday, January 22, and declines by about two pennies each day.

Hi Melf Elf,

Below the weekly HAUP chart which I guess represents the long term technical view on the stock.

In relation to our discussion about HAUP being a "pump and dump" stock the buying pressure seems to be more sustained this year compared to previous years.

I don't know where the stock will go in the coming weeks but I do know that they will report earnings within 3 to 4 weeks and this is a stock I would like to hold over earnings.

So my plan is to buy back the shares I sold last week if the stock touch the lower end of the price channel. For next week that stands at around 7, which seem to be a good long-term entry point for me.

From PC to  TV  .. from  TV to PC:

http://business.maktoob.com/electronicsnew.asp?id=20070111012041

Quote from: voova99 on January 21, 2007, 01:30:30 PM
From PC to  TV  .. from  TV to PC:

http://business.maktoob.com/electronicsnew.asp?id=20070111012041

Yes voova99, we see a lot of big players (like Sandisk and Apple) working on the PC --> TV segment, but not a lot supplying products for the inverse TV --> PC relationship. HAUP is one company on this second segment.

As Michael says, I don't want to be out of this stock when it reports earnings. This will be the best quarter ever for the company, and possibly gross and net profit margins will rise. And, keep in mind this is just a $73.6 M market cap company, so it can easily fly 20 or 30% in a big news day.

Melf doesn't like the stock (because he sees it as a recurrent pump & dump scheme) and says it is technically weak (applause for his technical work).

I respectfully disagree, the trend on my chart points north. I have a 6% profit on HAUP and I'll keep holding.

[

Quote from: Michael on January 21, 2007, 10:03:13 AM
Hi Melf Elf,

Below the weekly HAUP chart which I guess represents the long term technical view on the stock.

Michael,

That's an interesting point of discussion.

I would describe what you've drawn as the Intermediate trend (days, weeks, and months).  Long-term trends are defined more by weeks, months and years, and they aren't always easy to define simply as bullish or bearish, so we have to come up with some characterizations that best describe what's going on longer-term.

1. HAUP had a couple of nice pattern breakouts in 1999 and early 2000, prior to the Parabolic rally, almost to $50, and then the Parabolic Return to well below the origin of the Parabolic Rally.

2. Since then, the long-term 7-year trend has been a Crash Recovery bottoming process that has been sideways, with an upward bias.

3. HAUP had a nice breakout above a  3-year base, above 5.35 - 5.15, in 2004.  That put roughly $9.75 IN PLAY. ($5.35 - $0.95 (low) = $4.40 +$5.35 =  Target: $9.75.

HAUP got to 10.10, which would have been a ver-ry nice play, huh?!

4. But, in the two years prior to that breakout, and in all of the years since then, HAUP has exhibited the "fractal behavior" of Parabolic Rallies...and, Paraolic Returns, which simple means "repeating pattern of behavior," or "mirror image" of the behavior.  They've just been smaller in size than the originial one, in 2000.

5. The Intermediate Trend that you posted, Michael, again is more of that "fractal behavior."  HAUP has had a Parabolic Rally of 138% off the Summer, 2006 low.

Parabolic Rallies, generally, don't end well, and none of the Parabolic Rallies in HAUP have.  They've resulted in big percentage retracements.

That fractal behavior could be different this time, but that type of behavior in a stock puts me off it.  Hopefully, the fundamentals have improved enough (thank you for your work on that), that HAUP can avoid a significant selloff.

Good luck, Michael, and to everyone who is long.

Quote from: David Randolph link=topic=8365.msg85107#msg85107
Melf doesn't like the stock (because he sees it as a recurrent pump & dump scheme) and says it is technically weak (applause for his technical work).

I respectfully disagree, the trend on my chart points north. I have a 6% profit on HAUP and I'll keep holding.

Thanks, David, and I probably should clarify that I don't dislike HAUP in the sense that I'm "down on the stock."  Not at all.

My comments are based strictly on the technicals, the "Pump and Dump," or, "Parabolic Rally...Parabolic Return" or "Blowoff Rallies" (however we wish to characterize the behavior), and have nothing to with the company, or with its fundamentals.

Nothing would make me happier than to see HAUP rally like gangbusters.

This morning, HAUP broke below the neckline of the H&S Top in the Hourly chart.  It's currently just above the neckline, on a re-test.

What HAUP needs to do here, technically, is get back above the high of the Right Shoulder, which is 7.71, so 7.72. 

That puts it out of Harm's Way, at least temporarily, and is an indication that the Bearish H&S Top isn't bearish at all, if the the 8.47 high of the Head gets taken out to the upside, it's generally VERY bullish, because it's a Bear Trap!

Bears are thinking that this morning's break of the neckline is bearish, and they would be trapped if they shorted this morning's low.

In the daily chart, HAUP managed to pull off just exactly that scenario on November, when it took out the high of the Head, at 6.10.  If anyone wants to see that chart again, let me know.

Technically, that scenario is going to be a bit difficult here, since MACD will go down through zero in the daily chart, which could bring in some technical selling. 

That's less likely in a thinly traded stock like HAUP, though.   Technicians are less likely to be playing it, due to the lack of liquidity.  They like to get in and get out relatively easily.

Good luck!

Quote from: Melf Elf on January 22, 2007, 03:45:54 PM
What HAUP needs to do here, technically, is get back above the high of the Right Shoulder, which is 7.71, so 7.72. 

Sorry, that Scottrade chart was inaccurate.  Gr-r-r... 

The high of the Right Shoulder was this morning's 7.85, so HAUP needs 7.86 to get above it, to set up the Bear Trap (which would be an eventual upside takeout of 8.47).

Thanks for the short term technical analysis Melf Elf, I hope your bullish scenario plays out.

My chart shows an ascending trendline (red) that may support the stock. Volume has been very weak.

I attribute HAUP's last 4 days red candles to the weakness in the general market and some profit taking. I expect the stock to rebound strongly when it reports results for the December quarter or the general markets starts a new leg up.

I'll keep holding HAUP.

Quote from: Melf Elf on January 22, 2007, 03:54:59 PM
The high of the Right Shoulder was this morning's 7.85, so HAUP needs 7.86 to get above it, to set up the Bear Trap (which would be an eventual upside takeout of 8.47).

7.87 is good. 

There are two ways to look at the neckline:

1. It's 7.23 and 7.30 (solid purple line), and it got briefly penetrated to the downside, on the print of 7.20.

2. It's 7.23 and 7.20 (the dotted purple line), and HAUP only now is putting in a Right Shoulder.

In either case, HAUP needs to get back above 8.00, then take out the 8.47 high of the Head, like it did when it took out 6.10 last year.  That was the high of the DOUBLE H&S Top, the pattern in red.

Thanks for the analysis on HAUP Melf Elf, I appreciate it

Yes, let's see if it can get back up above $8, on close. That's just 1.65% away from yesterday's close, so it may happen today, we'll see.

Anyway, on my chart, $8 doesn't seem all that much relevant.

If we take a longer term perspective, the true resistance level was $7.17, and as long as we're above that, technically the stock should move towards the next resistance level, at $10.10.

Back on this thread I wrote:

QuoteWhat I'm pretty positive is that in a month's time I'll be in the green with HAUP and this is probably going to be an outstanding trade for the 3 Stocks on Fire Portfolio. Why? Well, everything points north:

- The company's target market is growing rapidly;
- The company is already profitable and it will be even more profitable as sales increase; the sales multiple is just 0.68.
- There wasn't any dilution since 1997, well, because the company is profitable, so we don't need to worry about dilution;

Back then I was losing money on HAUP. Now I'm 9.7% ahead and I'll keep holding.

HAUP opened with a bit of a gap up and that made it lose momentum throughout the session. It was a very low volume day, just 63,900 shares changing hands.

If you're new here, you can read the reasoning for being long this stock on the rest of this thread.

There's nothing new to add, I want to hold HAUP through the December quarter earnings presentation (fiscal Q1 2007).

HAUP needs a catalyst to blow through $8 and push to $10. I expect calendar 4th quarter earnings to be that catalyst, because it will probably be the best in the company's history.

HAUP's balance sheet looks strong to me, with $9 M in cash, $17 M in working capital and $0 long term debt. Market cap is just $75 M, which seems ridiculous to me, this being a profitable company with estimated 2007 revenues of something like $115 M.

Absolutely no dilution over the years as you can see on other pages of this thread.

I can't sell HAUP, I can't. And I won't.