Cup w/ Handles

[IIC]

Ski...I was basically agreeing with what you had said.

Now...I just looked at 49 examples of what IBD calls Cup w/ Handles...Some of them are not really close to what WON describes as a Cup w/ Handle.

I also noticed that he mentions that the price increase going up to the left side high should be at least 20%...But then I read that he says 30%...In some of his examples he uses the left side high right when a stock IPO's...so it actually can't have a price increase of 20 or 30% leading up to the left side high.

Unfortunately, conflicting parameters make it difficult to really set up a scan...Then there are others who describe the pattern a little differently than IBD does.

This makes it difficult to EXACTLY define the CwH pattern.

Here is the IPO example I was referring to:



I've often wondered why IBD does not have a section at least 1x a week on stocks that have a CwH pattern. IMO, there could be three possible reasons...1) Perhaps the pattern is not as good as inferred. 2) There are too many variations of the pattern. 3) They don't want to make it too easy...I really don't know???

As I mentioned, some paid sites that offer up CwH's require an Extremely "VIVID" imagination.

Now here is a chart that I would pretty much call a "Classic Cup w/ Handle"

[skiracer]

Ski...I was basically agreeing with what you had said.

Now...I just looked at 49 examples of what IBD calls Cup w/ Handles...Some of them are not really close to what WON describes as a Cup w/ Handle.

I also noticed that he mentions that the price increase going up to the left side high should be at least 20%...But then I read that he says 30%...In some of his examples he uses the left side high right when a stock IPO's...so it actually can't have a price increase of 20 or 30% leading up to the left side high.

Unfortunately, conflicting parameters make it difficult to really set up a scan...Then there are others who describe the pattern a little differently than IBD does.

This makes it difficult to EXACTLY define the CwH pattern.

Here is the IPO example I was referring to:



I've often wondered why IBD does not have a section at least 1x a week on stocks that have a CwH pattern. IMO, there could be three possible reasons...1) Perhaps the pattern is not as good as inferred. 2) There are too many variations of the pattern. 3) They don't want to make it too easy...I really don't know???

As I mentioned, some paid sites that offer up CwH's require an Extremely "VIVID" imagination.

Now here is a chart that I would pretty much call a "Classic Cup w/ Handle"

Doug,
IBD's definitions are theirs alone. I like and use their definition but it is so hard to find one that fits the definition exactly as defined. All of your examples, like Lyes, are nice cups and handles. It's very similar to Spike's use of the "fuzzy logic". If it is close to the definition and works for you and your trading then it should be ok. If you use it and it consistently doesn't pan out then you have to adjust it or discard it and try another definition or pattern. But a good discussion and this is the stuff we should be doing and talking about. Everyone should post an example of a stock in a cup and handle base or in some portion of one. We will learn more from each other and might even make a buck or two in the process with more charts and examples.

[peanuts]

primer

It's got the good fundies, too!

Can you spot the classic formation in CAS?

[skiracer]

This is one of Spike's picks that he used in the POTW a couple of weeks ago. I liked the stock and the chart at the time and put it in my list at StockCharts Public List. At the time it hadn't quite made the complete right side of it's cup base but I think it has now since it's up almost two points since then. The chart has my annotations on it but it is a nice example of a cup that is just getting ready to start it's handle maybe. I was waiting for it to do that and the subsequent breakout. About an 8 wk. base. Here's the chart:

[ParkTwain]

Building on the work of others

Doug, your interest in C&H sounds like more of an "academic" exercise. I'm not trying to bust your chops here, but why not consider building on the studies of patterns performed by others, such as Bulkowski? He has already identified **253** patterns and even ranks their performance as predictors.

Here is a handy visual index to 61 of this patterns, listed alphabetically:

http://thepatternsite.com/visualcpindex.html

Here is his ranking of the most powerful patterns:

http://thepatternsite.com/id75.html

//
Pattern ... Rank by Average Rise or Decline

Flags, down breakout N/A
Flags, up breakout N/A
Gaps N/A
Measured Move Down N/A
Measured Move Up N/A
Pennants, down breakout N/A
Pennants, up breakout N/A
Flags, High and Tight, up breakout 1
Head-and-Shoulders Tops, Complex, down breakout 1
Head-and-Shoulders Tops, down breakout 2
Islands, Long, down breakout 2
Triangles, Descending, up breakout 2
Diamond Bottoms, down breakout 3
Diamond Tops, down breakout 3
Horn Tops, down breakout 3
Rectangles Bottoms, up breakout 3
Broadening Wedges, Descending, down breakout 4
Pipe Bottom, up breakout 4
Pipe Tops, down breakout 4
Bump-and-run Reversal Tops, down breakout 5
Double Tops, Adam & Adam, down breakout 5
Rounding Bottoms, up breakout 5
Rounding Tops, down breakout 5
Scallops, Ascending and Inverted, up breakout 5
Triangles, Ascending, down breakout 5
Triple Tops, down breakout 5
Double Tops, Adam & Eve, down breakout 6
Double Tops, Eve & Eve, down breakout 6
Scallops, Inverted and Descending, down breakout 6
Three Rising Valleys, up breakout 6
Broadening Wedges, Ascending, down breakout 7
Double Bottoms, Eve & Eve, up breakout 7
Islands Reversals, down breakout 7
Rectangles Tops, down breakout 7
Scallops, Descending, down breakout 7
Three Falling Peaks, down breakout 7
Triangles, Symmetrical, down breakout 7
Cup-with-Handle, Inverted, down breakout 8
Head-and-Shoulders Bottoms, Complex, up breakout 8
Rectangles Tops, up breakout 8
Triangles, Descending, down breakout 8
Broadening Bottoms, down breakout 9
Broadening Formations, Right-Angled and Ascending, down breakout 9
Broadening Formations, Right-Angled and Descending, down breakout 9
Broadening Tops, down breakout 9
Broadening Wedges, Ascending, up breakout 9
Bump-and-Run Reversal Bottoms, up breakout 9
Double Tops, Eve & Adam, down breakout 9
Head-and-Shoulders Bottoms, up breakout 9
Wedges, Falling, down breakout 9
Double Bottoms, Adam & Eve, up breakout 10
Rectangles Bottoms, down breakout 10
Rounding Tops, up breakout 10
Scallops, Ascending, down breakout 10
Triple Bottoms, up breakout 10
Wedges, Rising, down breakout 10
Diamond Bottoms, up breakout 11
Double Bottoms, Adam & Adam, up breakout 12
Double Bottoms, Eve & Adam, up breakout 12
Horn Bottoms, up breakout 12
Triangles, Ascending, up breakout 12
Cup-with-Handle, up breakout 13
Broadening Wedges, Descending, up breakout 14
Wedges, Falling, up breakout 15
Islands, Long, up breakout 16
Scallops, Ascending, up breakout 16
Triangles, Symmetrical, up breakout 16
Broadening Formations, Right-Angled and Ascending, up breakout 17
Broadening Tops, up breakout 17
Broadening Formations, Right-Angled and Descending, up breakout 18
Wedges, Rising, up breakout 18
Broadening Bottoms, up breakout 19
Diamond Tops, up breakout 19
Islands Reversals, up breakout 20
Scallops, Descending, up breakout 21
//

This raw list doesn't mention how much difference there is between #2 and #3, for instance. One would have to dig this information out of the pages on his site that describe the individual patterns. These differences can be very significant to one's decision about what patterens to focus on.

Here is his analysis of one of his two #1 ranked patterns, the "Flag, High and Tight":

http://thepatternsite.com/htf.html

This is not bad work he has produced. And this "Flag, High and Tight" pattern is probably much easier to identify using a programmatic method than a C&H.

[skiracer]

I'm pretty fond of the double-d cup formation, as long as its natural.

I missed that the first time Tat. I'm more of a C cup base or a major B.

[skiracer]

I have his books and have read them all. I use his percentages all the time but when it comes down to finding these patterns it never is exactly as he or anyone else defines them. That's why you have to read his books and apply them to your own trading. No one finds them exactly as they are written about and specifically defined.

[IIC]

That's a super site Park....I noticed that the Rounding bottom is much higher rated than the CwH. That kinda goes along with what Ski and I were saying about buying in the right side of the cup formation. And some of those Rounding bottoms will end up being CwH's.

Anyway, so far I have over 60 Cup w/ handles this morning...I didn't write down the one's I found last night as I was trying to figure out how fast I could scan charts.

Later this weekend I will post some or all of the one's I found...I want to try some more scanning though before I do that.

But Ski...you are right...Not one of the 60+ EXACTLY meet every single criteria...For instance maybe the % increase up to the left side was not over 20%, the vol. did not dry up at the bottom of the cup or the dnside vol on the handle was not as lo as it should be.

All of them I have so far are in the handle phase...I wasn't looking for the right side cup formation although I came across a few by accident.

[skiracer]

That's a super site Park....I noticed that the Rounding bottom is much higher rated than the CwH. That kinda goes along with what Ski and I were saying about buying in the right side of the cup formation. And some of those Rounding bottoms will end up being CwH's.

Anyway, so far I have over 60 Cup w/ handles this morning...I didn't write down the one's I found last night as I was trying to figure out how fast I could scan charts.

Later this weekend I will post some or all of the one's I found...I want to try some more scanning though before I do that.

But Ski...you are right...Not one of the 60+ EXACTLY meet every single criteria...For instance maybe the % increase up to the left side was not over 20%, the vol. did not dry up at the bottom of the cup or the dnside vol on the handle was not as lo as it should be.

All of them I have so far are in the handle phase...I wasn't looking for the right side cup formation although I came across a few by accident.

If I had my druthers I would opt to find them at a bottom (of the cup base) and trade them up the right side rather than buy them at a much higher price, even at the bottom of the handle, in the handle. Personally I find that catching the right side is much more profitable than waiting for the handle and then the chances of it breaking out from the cup and handle formation. You will also find a much greater assortment of stocks at 52 wk. lows that are starting to turn up making the right side of the cup.

[IIC]

If I had my druthers I would opt to find them at a bottom (of the cup base) and trade them up the right side rather than buy them at a much higher price, even at the bottom of the handle, in the handle. Personally I find that catching the right side is much more profitable than waiting for the handle and then the chances of it breaking out from the cup and handle formation. You will also find a much greater assortment of stocks at 52 wk. lows that are starting to turn up making the right side of the cup.

Well, nothing wrong with that...But I've been at the computer for most of the past 7 hours...I need a little break. I set up those I found in html linked to stockcharts so even non-subscribers can view them...But I'm finding more so I think I'll take a break for a while. When I'm done I will post them either at Sharptraders or Mr. B.

I'll let you know.

[billyjoe]

There was a guy that used to post cup/handle breakouts on IBD forums. I checked 25 or so and they basically all failed. I posted my results and never heard much response. Didn't IBD used to say don't buy more than 5% above the breakout point? Ski's method of buying when the right side is lower always seemed to make more sense. That way you could get a nice gain and still escape a breakout failure if you were alert.

-------------billyjoe

[skiracer]

There was a guy that used to post cup/handle breakouts on IBD forums. I checked 25 or so and they basically all failed. I posted my results and never heard much response. Didn't IBD used to say don't buy more than 5% above the breakout point? Ski's method of buying when the right side is lower always seemed to make more sense. That way you could get a nice gain and still escape a breakout failure if you were alert.

-------------billyjoe

Billyjoe,
I think more of them make the right side all the way to even with the left side than survive the handle and then go on to successfully breakout. I think it was a brainwash by O'Neil and IBD with their subscribers. It's the only chart formation they ever talk about or use as far as I know. Ascending and symetrical triangles are much more successful in my opinion.

[billyjoe]

Billyjoe,
I think more of them make the right side all the way to even with the left side than survive the handle and then go on to successfully breakout. I think it was a brainwash by O'Neil and IBD with their subscribers. It's the only chart formation they ever talk about or use as far as I know. Ascending and symetrical triangles are much more successful in my opinion.

Ski,
I absolutely agree with that. Maybe things were different when O'Neil first started talking about the pattern.

------------billyjoe

[IIC]

Sheesh!!!

I read complaints about the lack of stock info posted at this forum...I decide to start a thread which I think many might be interested in...And what do I get???...More Complaints!!!

Well...it doesn't bother me much because I happen to want to talk about it and I'm as "Thick-skinned" as anyone else here...But now I realize why some people don't post...Lye was wrong...I'm not all that sensitive...At least for myself...However, I am sensitive to how others might feel.

Billy: WON did not invent the Cup w/ Handle...Period!!!...He simply changed the name of Jiler's Saucer w/ Platform pattern as far as I'm concerned...Where did Jiler get it???...I have no idea.

SKI: The CwH is not the ONLY pattern they talk about...Did you notice the link to the article I posted from IBD about 50 SMA Bouncers? Is it coincidence that they ran that about 6 weeks after I started posting the IIC 100 50 SMA Bouncers???...Maybe it is a coincidence...But if they start posting the IBD 100 New Highs everyday...Well, what can I say???

Billy: Who was that who posted the Cup w/ Handles?...The GREATSTOCKPICKS.COM Guy? He was an A**hole anyway.

There is nothing to say that a CwH or any other chart pattern is gonna work...It is just a starting point...Like many patterns...Anyone who thinks a chart pattern is a GUARANTEE for success is an idiot and deserves to go broke IMO.

[billyjoe]

Doug,
I think it was the GREATSTOCKPICKS.com guy. Is he still around ? I know that O'Neil didn't discover the cup w/handle , but he certainly exploited it. If you give me a hard time I'll stay at the kneegeeks.com site even though it's depressing as hell. You'll find me on the scar tissue thread.

------------billyjoe