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[IIC]

Wow. 100-9 is pretty darn good! Trying to wrap my head around those cups with handles.

Well...like I said...It wasn't all that...I trade mostly for nickels, dimes and quarters...So I need to be right a lot and I need to make a lot of trades.

As far as the CwH's what do you need to know?

Doug

[em26jamie]

I think I've read the answer I had. But what's the track record like? Does it usually keep going up for days after the breakout? Or is the breakout usually just a shakeout instead? If you buy on the breakout are you already too late?

[em26jamie]

NVS looks like a Cup with handle about to breakout. Most of the sites you link to say to buy went the price goes above the right side lip of the cup. That point with NVS is almost at the same point. Do you wait until it closes above the point or when it actually goes above that point? And how far do these breakouts usually go?

[skiracer]

NVS looks like a Cup with handle about to breakout. Most of the sites you link to say to buy went the price goes above the right side lip of the cup. That point with NVS is almost at the same point. Do you wait until it closes above the point or when it actually goes above that point? And how far do these breakouts usually go?

Not to take away from Doug with these cup and handle bases but you might want to give some thought to this scenario. I've been talking about these cup bases for years here and they are one of my favorite chart patterns. At some point after watching and waiting for them to develop and form the cup base and then the handle I finally came to the realization that I was missing out on the biggest part of the move itself. Which is the formation of the right side of the cup after the bottom is put in. Check out www.thepatternsite.com for more info on the chart pattern itself and the percentages it either will develop, succeed in a breakout, or fail. A lot of valuable time can be put into and wasted watching for that cup base and then the handle to develop and trying to catch it at the right moment. In my own estimation waiting for that handle and the so called ensuing breakout doesn't always work out the way you expect.
But I will tell you what will and does work out with these cup bases. There are 3 important points.
1. finding the developing cup bases when they are trending down and looking for a bottom. I like and look for the most uniform ones. I've found that after looking at thousands of charts on them that the ones that are the most uniform usually work out the best in the end.
2. finding and determining the bottom is in place. doing this comes with experience but again I always look for the ones that have made their left side and have turned and are moving somewhat horizontally and in a uniform, U shaped, pattern. there will come a point where they will begin to turn up and that is where I like to catch them for that beautiful ride up the right side. the best part about the play is that if it doesn't go and develop the way you are expecting it to then the most you will lose is your predetermined exit at 7% below your entry. that is the most significant point in all of this. you can limit any loss. I have made hundreds of trades on these developing cup bases and have had to exit a high percentage of them but none where I lost more than 7% or less. I have also hit on a high percentage of them and taken that ride up the right side of the cup and am way way way out in front of the losses. controlling the trade is the key in any trade and that is all that you have to do, aside from finding good ones, with these cup bases and you will be a big winner.
3. I usually exit the trade when I see that it is running out of strength and moving into the handle part of it, if it even does that, and you can always re-enter if and when it does finish the handle and realizes the "breakout". To be honest I have found that O'neill and his take on these cup and handles patterns are usually late to the party. and that the ones that do go completely thru the cup formation, handle, and "breakout" are fewer and farther between.
The above play is tried and proven and I have done it hundreds of times. It is perhaps my most favorite chart pattern and certainly the one I have made the most money using.

[IIC]

Ski mentioned this a long time ago and he offers some good info.

As far as trading the CwH itself...I have not done that for many years...Most never break out unless the market is roaring and of those that do most fail...People still like it tho and they are easy for me to find so I post 'em.

There is one way I do like them tho...In the Pivot Window for very short term trades...I had a contest to name this and BillyJoe won w/ Pivot Window which is the point when the handle turns up until it gets to the right side cup high...My belief is that although O'Neil didn't discover the CwH he just renamed the pattern and later popularized it...I believe there are sharks out there driving the price up to the breakout point and then bailing leaving Joe and Jane Canslim holding the bag.

I would follow the 3 weeks tight and Flags, Pennants and High Tight Flags lists I post if I were you...Some Cwh's will also be on the Flags lists.

[em26jamie]

I was actually thinking about Wall St driving a price up only take it all away once they see everyone else has gotten on board. My wife asked me why some stocks will be high early in the day and then sell off throughout the day, if the company did something to cause that. I said, "No. That's just Wall St. stealing everyone's money."

The 3 weeks tight is interesting because it's nice and simple, with 3 simple rules.

[IIC]

I was actually thinking about Wall St driving a price up only take it all away once they see everyone else has gotten on board. My wife asked me why some stocks will be high early in the day and then sell off throughout the day, if the company did something to cause that. I said, "No. That's just Wall St. stealing everyone's money."

The 3 weeks tight is interesting because it's nice and simple, with 3 simple rules.

I only post the 3 weeks tight from a select combo of lists...There are actually quite a few more every week...Doug

[billyjoe]

I only post the 3 weeks tight from a select combo of lists...There are actually quite a few more every week...Doug

Doug, 3 weeks tight sounds a lot like the consolidation pattern I asked you to post. Now I can really start making some $$.

-----------------billy

[IIC]

Doug, 3 weeks tight sounds a lot like the consolidation pattern I asked you to post. Now I can really start making some $$.

-----------------billy

I also like the Flat Base altho on a FB I use the intraday H/L...On the 3 weeks tight I just use the weekly close.

Doug