Generic and branded drugmaker Par Pharmaceutical (NYSE:PRX - News) notched a 52-week high in mid-October.

It then declined 17% over the next two weeks. The slippage began just before the general market came under pressure in late October.

The stock fell under its 10-week moving average in the last week of October. But an experienced chart reader would've seen some positives in the decline.

The first down week was in below-average volume. The second down week was in above-average volume, but the weekly close was in the upper 60% of the range, a sign of support.

For the past three weeks, Par has risen to form the right side of the base. The weekly chart shows one net week of accumulation within the base.

The Accumulation/Distribution Rating remains strong.

One other potential plus is the Relative Strength line. It isn't far off a high. Should the RS line move to new-high ground, especially if it precedes a breakout from a valid base, that would be a bullish sign.

Because the base is more than 15% deep, it needs to consolidate a bit longer to meet the minimum six-week length for a cup-without-handle base or the minimum seven weeks for a cup with handle.