In today's volatile bear-market environment everybody wants to know if the market will continue lower, or if it will base, or if it will snapback, and, if it does snapback, how far? My answer to these questions: I don't know. Moreover, I care only to a limited degree.

As a technician I certainly try to analyze and anticipate the market moves, but I am most concerned, when it comes to intermediate-term holdings, with individual chart patterns. Especially at a time when the market is as volatile as it is and being whipsawed by news headlines, I look for individual stocks that have promising patterns, stocks that have the best chance of weathering a market sell-off and having strong up-moves when the market does turn.

How do I find them? I look for charts first and foremost with long base patterns (using daily and weekly time intervals), stocks that have dropped significantly but that have had six months to as much as two years to level off. It's the old adage: You can't catch a falling knife. Once a stock has bottomed and is basing for a time, however, then it has the potential to come back up.

But not always, of course. Typically, during the basing period a stock will try to break out and fail several times. The failure points become resistance levels. I look for stocks that have broken out above these resistance points and done so on high volume.

Let me use the example of Neoware (NWRE) to illustrate this basing and breakout phenomenon. After declining about 90% from its bull-market high around 10 to about 1, Neoware based out for a couple years and broke out in December 2001 on big volume. Once previous resistance around 2.25-.50 was broken on volume, the stock was off to the races on a bullish trend.

We named Neoware one of our top Charts of the Week back in February at around $7 even though it had gained so much so fast because the up-channel after the long period of basing appeared strongly intact. Also, as you can't see from the chart, the stock had previous highs of around 10 established in 1996, 1997, and again 2000 that it looked destined to approach. It bounced around and slightly above 10 several times in the March-April period and once more in May and after breaking through it again in June it hasn't looked back.