Cup and Handle...

[sebfr]

Hi,

some words about Cup and Handle : a chart pattern with a high accuracy...

Definition :
A pattern on bar charts resembling a cup with a handle. The cup is in the shape of a "U" and the handle has a slight downward drift. The right-hand side of the pattern has low trading volume. It can be as short as seven weeks and as long as 65 weeks.

As the stock comes up to test the old highs, the stock will incur selling pressure by the people who bought at or near the old high. This selling pressure will make the stock price trade sideways with a tendency towards a downtrend for four days to four weeks... then it takes off. Below is an example of a cup and handle chart pattern:

A couple points on trying to detect cup and handles:   Length - Generally, cups with longer and more "U" shaped bottoms, the stronger the signal. Avoid cups with a sharp "V" bottoms.    Depth - Ideally, the cup should not be too deep. Also, avoid handles which are too deep since the handles should form in the top half of the cup pattern.    Volume - Volume should dry up on the decline and remain lower than average in the base of the bowl. It should then increase when the stock finally starts to make its move back up to test the old high.    Retest (of old high) - doesn't have touch or come within a few ticks of old high. However, the further the top of the handle is away from the highs, the more significant the breakout needs to be.

[sebfr]

Have a look on ADTR...

We have a cup and Handle....You can buy now at he support at about 0.24 or wait and see for a breakout at about 0.32-0.33

Good trade !

[atl_trader]

Hi,

some words about Cup and Handle : a chart pattern with a high accuracy...

Definition :
A pattern on bar charts resembling a cup with a handle. The cup is in the shape of a "U" and the handle has a slight downward drift. The right-hand side of the pattern has low trading volume. It can be as short as seven weeks and as long as 65 weeks.

As the stock comes up to test the old highs, the stock will incur selling pressure by the people who bought at or near the old high. This selling pressure will make the stock price trade sideways with a tendency towards a downtrend for four days to four weeks... then it takes off. Below is an example of a cup and handle chart pattern:

A couple points on trying to detect cup and handles:   Length - Generally, cups with longer and more "U" shaped bottoms, the stronger the signal. Avoid cups with a sharp "V" bottoms.    Depth - Ideally, the cup should not be too deep. Also, avoid handles which are too deep since the handles should form in the top half of the cup pattern.    Volume - Volume should dry up on the decline and remain lower than average in the base of the bowl. It should then increase when the stock finally starts to make its move back up to test the old high.    Retest (of old high) - doesn't have touch or come within a few ticks of old high. However, the further the top of the handle is away from the highs, the more significant the breakout needs to be.

Sebfr,

Nice explanation.  It made me realize I've been looking at an alert for this for sometime in my scanning tool but only now realize its for cups and handles - they just call it something else:  false gap retracement.  Here's a manually refreshable list that's real-time during the market:
http://www.trade-ideas.com/SingleAlertType/FGUR/False_gap_up_retracement.html

Here's their definition: http://www.trade-ideas.com/Help.html#FGUR

thanks again

[VikingFan]

MVCO is a great example of a Cup and Handle breakout in progress.  The measurement of this breakout is 17.50 or so.  With the fundamentals pointing much higher than that (reported blowout earnings of .60 EPS last quarter), 17.50 should be easily achievable.  After the initial breakout over 12.35, the stock got extended at 14.80 and has pulled back to the lower 13's. 

[domination]

i'm getting thirsty

[ScottishTrader]

I posted this one on another thread, but I thought I would put it in the cup & handle thread too - OMNI looks like it is basing in the handle of a sizable cup, and ready to break - any thoughts??

Any other cup n handles out there right now??

[Deadb440]

I'm not sure that's a valid Cup and handle with the volatility on the upside.  If it is though the handle appears to have broken down already into a neutral pattern.

[sebfr]

A good example with UGNE in 2005...

[sebfr]

Great Scottishtrader..I applaud you...

OMNI made more 100% in few months !!!!

[ScottishTrader]

Thanks sebfr, I just wish I had played it now!!!  Hindsight is always 20/20 eh?

Still nice to see a classic pattern breakout come to fruition - just gotta find some more!

[sebfr]

I found an another...BRVOE ! Great

It is not time to play this pattern but we must be patient...

excuse me but i don' t have understand your question "Hindsight is always 20/20 eh?"..

[Se7en]

can't you post them just after the handle is done!:)

[sebfr]

Give examples permit us to educate ourself...Be your own master.

If i find some others i will post here...I have give an example "in life" with SRVY..But for me it not the "perfect" moment to trade this pattern.

[sebfr]

You have another one...SSRI :

[joet]

Watch GST for the handle to break to the upside...