Comments on: 4 Cup & Handle Patterns to Watch

By: TheStockBandit

TheStockBandit — Wed, 18 Nov 2009 20:17:23 +0000

Hey PJ,

Thanks for stopping by. Generally yes, the more V-shaped the pattern, the less it is a cup…the ideal look is a gradual pullback and recovery, as I mentioned in the post (”Third”). The handle itself can either be downward sloping, or it can be a horizontal channel. What you want to avoid is an upward-sloping handle, as rising channels tend to get resolved to the downside.

Hope this clarifies!

Jeff

By: pj

pj — Wed, 18 Nov 2009 20:04:24 +0000

Doesn’t the handles have to have a slight downward drift? Apple’s cup looks like more a v-shaped cup which should be avoid?

By: Delbertino

Delbertino — Wed, 18 Nov 2009 15:05:31 +0000

Much thanx; let’s shut Buffet up

By: rofsjan

rofsjan — Wed, 18 Nov 2009 01:46:20 +0000

Thank you for the great post.

By: TheStockBandit

TheStockBandit — Tue, 17 Nov 2009 21:48:34 +0000

Thanks Pete & good to see you here!

I do like to see volume surge on the breakout, implies to me there is greater participation as the stock moves out of the consolidation (handle). Also, a close beneath the handle is grounds for either redrawing the handle, or negating the pattern altogether if the handle cannot be redrawn accurately.

Jeff

By: pete

pete — Tue, 17 Nov 2009 21:44:57 +0000

Jeff - nice post. Two questions: (1) Does volume in the breakout matter to you? (2) What violates the set up - a close below the low of handle?

Thanks,

Pete

By: TheStockBandit

TheStockBandit — Tue, 17 Nov 2009 20:16:55 +0000

Hey Ajesh,

Thanks for stopping by! What you may be referring to is a saucer or rounded bottom. They will look similar to the cup & handle, but no handle and the saucer will often take much more time to form.

Hope this helps!

Jeff

By: Ajesh

Ajesh — Tue, 17 Nov 2009 20:12:12 +0000

Hi Jeff,

Won’t a cup be sometimes formed as part of a bottoming process?

Thanks,
-Ajesh