3SOF

Hi joet,

Great find with this stock...I applaud you... But for me it is not a "cup and handle" for two reasons :
1. "Cup and handle" is essentially a continuation pattern...And as you see on GST chart, GST is on a Downtrend. ok sometimes "Cup and handle" is a reversal pattern. So why not ? So see the second parameter :
2. The "left cup" is less than the "right cup"...

This topic is good http://www.3stocksonfire.org/trading/index.php?topic=5933.0

But it is a good reversal chart :
1. Volume on base (>= 2 months -> valid) are high.
2. Divergence between price and indicators can be found : Price made new low and Indicators not.
3. Gap of breakout with high volume
4. Two trendline breakout
5. Candelstick : Three rising methods appeared ?

Two strategy :
1. Aggressive : Buy now at 2.85 with a stop loss near support at 2.75-2.60
2. Conservative : waiting for the signal of a threerising methods...Withe marabozu with high volume and price close above last with marabozu...

Theoric target :
1. 3.8
2. Use fibonacci retracement with support/resistance : a. conservative ->3.48 b. Aggressive -> 3.90

Stop loss :
Pattern is invalided if gap is filled...

What do you think of this analysis ?

Thanx SEBFR
I appreciate your work.  Some new jargon in there for me to chew on 
we must credit Terliso for the find, as i bought after reading that post in stock picking.

He is currently waiting to enter to see if the gap at 2.50 gets filled, i will be stopped out if it does, unless very light volume.

I still see a Cup formed between June 12 and aug 28, currently forming the handle... When you talk about cup one and 2 are you refering to sides of the cup or small cups in themselves?

I like the consolidation (coiling?) we see here... if volume comes in i hope to see a run up...  But Melf has me worried Look at his ASTM example, that chart was similar to GST back in Jan-march 06 and after it coiled it fell flat on its face

Lets see were GST goes next week  Cheers joe

Thanks joet and Thanks to Terliso.. Terliso has ea godd strategy..Waiting for a correction near 2.50 level..I just hope that GST don't go to touch the sky before !

When I talk about cup one and 2 i am refering to sides of the cup. For having a "Cup" you need before an uptrend. And before June 12  we don't have an uptrend. So for me we can't say we have a cup.

ASTM don't have a base before the power spike at the end of march...Market has tested the "gap of breakout".Cf. Chart

We will see Unfortunately it is difficult to predict next trend of market  . But if it was possible everybody will take the same decisions and it will be very sad. Market is a challenge. It learn a lot on our own psychology. We can just try to be better than chance and make trades with a good Reward/Risk ratio.

See you soon. Sebfr.

Hi,

I am dissapointed..I don't have see a wonderful "Cup and handle" on BTJ...Sniff

Hi,

A good Opportunity on GIGM...Cf. Thread at "stock picking"

Howdie SEBFR
are you seeing the cup/handle form on the bollinger band?  The fromation sure is not very clear in your box.  Are you buying GIGM at the 10.30 level, volume is intriguing and trend is strong...  tempting.   Help me see the formation you speak of!
Cheers Joe

Hi joet,

You know perfect "Cup and handle" is rarely...That is why be a trader can be compare like an artist..At each to see and find new chart pattern...

In the theory, Bollinger bands are not essential in the pattern. But you can use them, why not ?

The buying level ? It depends on your style of trading...There is not one way to play a pattern.. You can buy before the end of the pattern (more risky), you can buy after the trendline breakout, you can bu on a pullback after the pullback...At each to decide. Be your own master.

Trend is strong ok, but we can see a long red day after the breakout...It could be a false signal and finally, a double top could be appear..That is why it is most important to analyse your possible loss than your gains.

Look at HPOL... Very perfect...Rare..Better than GIGM because we are just in the third eliott wave..False start are reduce.

Look at DECK... Almost terminate...

Have a look on MEH...A false start ! But actually, pattern is not invalided...When we see MEH we remark 3 eliott wave..

Perhaps MEH will continue to go up perhaps not but it is important to notice that this pattern works better after the first strong uptrend..

ISIG 

Hi,

Have a look on JPM...

ANEN ?

FMD...

Thanx for the posts Sebfr!  Why the frustration on ANEN, did you miss the trade?

Did you short GLW today.  I appreciate the strategies in your posts.  I bought some ISIG on the retest of the 3.50 break out (dropped to 3.55) will see if it holds up!

Melf spoke of the nuances of chart reading today and your posts are a fantastic example.  See if i am reading your thought correctly here...  you are short on GLW because you see the recent rally more of a bear flag (correct name?) than a cup handle break up because it has a more established down trend, longer durationthan FMD which your are bullish on the recent break out up!?? (I see a possible short term short on FMD, especially if it gets 2 more days of green to send the rsi to 85 or so, it will need to correct some and it hass been volitle...

Still waching HPOL?  tommorrow looks like a possible entry if it can break 6.26!!!  G pattern and a nice handle on the cup.. trend is up, volme is good and support at 6 held nicely... I will be watching.  Melf should like this one...
Cheers Joe