Longtop Works On Cup Within Larger Pattern

• Paul Whitfield
• On 6:56 pm EDT, Thursday September 24, 2009

China-based Longtop Financial Technologies (NYSE:LFT - News) debuted as an initial public offering in late October 2007 -- just in time for the beginning of the bear market.

It declined 70%, a bit more than the NYSE composite's 60% drop.

That wasn't excessive, considering that Longtop is a growth stock, an IPO and Chinese. Although it trades on the NYSE, and that's the most relevant comparison, it's useful to recall that the Shanghai composite fell 73% in the correction.

When you look at Longtop's chart today, it looks much better.

The weekly chart shows that even during the big decline, volume was muted.

Trade began to pick up after the general market turned up in March.

So you could look at Longtop as one gigantic cup base with a handle that began in August.

The buy point 15uld be 33.04.

You could also see the action since August as a cup base within the larger pattern.

From that perspective, Longtop is in the sixth week of a cup-without-handle base. If it doesn't form a handle, the buy point 15uld be 33.04, exactly the same as the big pattern.

In the smaller cup, there is one week of net accumulation. That could use a little improvement.