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Cable and Wireless plc (CWP) Message Board

  • gardner5555 gardner5555 Sep 1, 2002 6:06 PM Flag

    Inverse Head and Shoulders ?

    There is not much technical discussion on this message board, but I thought that I would throw out this possibility...

    Month long shoulder at 7.25 us with a head down to 6.5 and now a right shoulder forming at the 7.5 range.

    I realize that the head formation is a pin head and that some think that TA is for pin heads, but thought that I would get a few opinions.

    Gardner555

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    • I posted the message that the chart looked like a head and shoulders.

      Well.... The chart pattern is starting to look like he has a very droopy right shoulder.

      Gardner555

    • It was passed but, as of yet, they don't appear to have taken any action. In fact they said, regarding the $3Billion cash pile, that it would not be 'handed back' to shareholders this year. Buybacks, I think, are classed by them as 'handing back'.

      Nice post on the fool! Thanks.

    • The buy back which was authorized for up to 15% was completed at a significant savings. I believe CWP actually spent around $850M for the repurchase.

      I also seem recall an item on the agenda at the AGM to authorize an additional buyback. Does anyone know if it passed or am I incorrect?

      There was significant discussion on the Fool UK board regarding this issue.

      -LMB

    • The stock started its downtrend around $40/share in second quarter of yr 2000. Initially it fired a warning by suddenly dipping below its 200 days uptrending moving average, only to quickly bounce above it. Then in 3rd quarter of yr 2000 it again went below 200 days moving average and has remained there ever since. The speed of descent seems to be decelerating in last three months and that is a positive sign but not good enough for any serious commitment. The current 200 days descending moving average is $10 dollars and it is still downtrending. The stock needs to close above $10 before the tides can be said to have started to turn. The technical formation you noticed appears to be a minor blip in a flawless downtrend. No offense intended.

      • 1 Reply to MUSTY321
      • Thanks Musty,

        No offense taken, lets hear it all.

        The view of the last 5 years with 200 day MA is revealing. It certainly has stayed below the 200 day MA although the gap appears to be closing. Just looking at the chart, I would estimate that assuming price stays around 7.25 for the next 2 months (60 days or other shoulder), big assumption, yes, that the 200 day MA would be right around 8. This would make the crossing of 200 day MA an easy move to accomplish. All theoretical, but would you expect a major move to upside once the 200 day MA is crossed? How closely watched are the 200 day MAs?

        The speed of descent or perhaps slope as it was called back in calculus also appears to be flattening or approaching zero, rise or fall over run, esp. last 4-5 months. Volume appears to have significantly decreased in the last 4-5 months. I haven't looked at a TA book in a few years but these two together are a good sign. Price is at least temporarily holding, while selling volume is not pressuring the price lower. Another big assumption it holds for the two months, Should one expect volume to pick up with increase in price as it approaches/crosses the 200 day MA?

        I am more a fundamental analysis guy, but like to at least check out the TA side of things. TA says don't do a thing until it crosses the 200 day MA, while FA says at least to me that CW is good purchase at these levels.

        One last comment, it seems to me that the tone of the board and uk.fools board has become decidedly pessimistic (they have been right the last few years)in the last few months vs the last year when there was always someone or majority presenting the optimistic side of the story. Contrarian indicator of extreme pessimism?

        One way or the other, time will tell.

        Gardner555

 

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