Here is another issue that fits the case of our previous letter — a beaten down tech stock with an interesting bottom pattern. Interestingly this entire group of stocks has similar looking patterns. Double or complex bottoms with clearly defined necklines. Many of these necklines are in close proximity or have just been pierced by power bars. We remain deeply suspicious about the true nature of this rally and would certainly place carefully considered stops on scale in positions — but when you get buy signals you must honor them –just like Charlie Brown and Lucy and the football.
CPWR has some interesting power bars coming off the low. As in all these cases the conservative buy is on a strong penetration of the horizontal line, but plungers will get a head start on the power bars.