bmn and the 1.04 resistance

There are so many numerous phallacies regarding certain chart formations, and on Hotcopper we have hundreds of new investors and budding chartists, and in many cases they are being mislead.

The GAP is one pattern that finally we have put to bed. Ther are many different gaps... etc etc.

Another error most make is in relation to "Double Tops".

Lets all get this straight: "Double Tops" are one of the most common sights in chart patterns. They occur every day, and eventually on every stock. However what people see 76% of the time is NOT in fact a double top.

Some people think that BMN is in a "Double Top" situation.

WRONG!!!

The MOST important aspect of a true "double top" formation is that it occurs at the END of an UPWARD trend and signifies a REVERSAL OF THE TREND down ... In reverse, the "Double Bottom" pattern occurs at the end of a DOWN trend, and signifies a reversal upwards.

What BMN has encountered here at $1.04 is purely a RESISTANCE. This is a level that buyers & sellers view are happy at. Sellers happy to take profits at, buyers happy to buy up to. Thats why churn & consolidation occurs to tip the scale of balance.

Some of you may have previously seen me mention that 80 cents, and then 90 cents were the strongest resistance points. They are IMO. BMN will leave this $ 1.04 much more easily that it did thos levels

So please, for goodness dont anybody come here and call BMN a "Double Top"

:)

__________________________________________________

Just a quote for the dubious:

Double Top Chart Pattern

Introduction
A double top occurs when prices form two distinct peaks on a chart. A double top is only complete, however, when prices decline below the lowest low - the "valley floor" - of the pattern.

The double top is a reversal pattern of an upward trend in a stock's price. The double top marks an uptrend in the process of becoming a downtrend.

Sometimes called an "M" formation because of the pattern it creates on the chart, the double top is one of the most frequently seen and common of the patterns. Because they seem to be so easy to identify, the double top should be approached with caution by the investor.

According to Schabacker, the double top is a "much misunderstood formation." Many investors assume that, because the double top is such a common pattern, it is consistently reliable. This is not the case. Schabacker estimates that probably not more than a third of them signal reversal and that most patterns which an investor might call a double top are not in fact that formation at all.

The double top is a pattern, therefore, that requires close study for correct identification.

As mentioned, the double top is a reversal formation. It begins with prices in an uptrend. Analysts focus on specific characteristics of that uptrend when searching for a valid double top. The trend upwards should be fairly long and healthy. Bulkowski maintains that "the price trend should not be a retrace in an extended decline but generally has a stair-step appearance. Schabacker confirms this approach, explaining that if the stock has been in a long, healthy uptrend, the double top is more likely to develop into a reversal. If the uptrend is short, the double top may not hold and the uptrend will continue.

http://www.trending123.com/patterns/double_top.html