Optus 16/6/99

Optus is in an interesting situation at present. After a short burst up to $4.10, CWO has been in a down trend since then. Notice the triangle formation; often made prior to the release of important news to the market. In this instance, the attempted takeover of AAPT. Somehow the market seems to know important news is coming.

The triangle break was downwards - at which time a trend line could be drawn joining the tops. ( In this instance an Elliott wave pattern within the channel is difficult to find.)

Note the move to a previous top at $2.90 to $3.00. Note the most recent high at $3.23. This occurred when CWO announced to the market its internet alliance with Exite@Home. The good news simply made another high (a lower top on the weekly) within the trend channel: ie for traders a short term sell signal.

For CWO to move up , it must move out of the down channel. So a buy is not given till this happens. If CWO is to now move higher, EIS would expect a low somewhere in the middle of the down channel, around $2.90 (previous tops) higher than the low at $2.76. For the present, this low at $2.76 has the hallmarks of the end of a time frame and low of this down channel. Lets see.

Finally, illustrating how EIS links charting and other CAE classes, EIS reads with interest the AFR June 11: "Joining the blackjack table with Bill Gates and Paul Allen could be a sure way to win for Optus chief executive Chris Anderson. In the past few months, America's billionaire geeks have staked billions of dollars on the prospect of using cable television lines to deliver internet access at blistering speeds. If middle America turns on to the idea another communications bonanza will begin. By joining forces with At Home Corporation, Chris Anderson gains an inside view of the great internet gamble Americans are talking. He also gains access to to a loose collection of alliances that could help tip the scales against Telstra. At home is at the centre of the CARTEL run by telco giant AT&T and 18 cable companies with networks that pass 58.5 million North American homes. After several years of negotiations, it has the EXCLUSIVE right to offer internet access across those networks until 2002, enraging dial up internet giants such as America online".