3 replies to this topic

[skyymaster]

See weekly chart for Nasdaq between May'06 - Nov '06. Bottom at 2000 breakout at 2400. We are at 2800. Darn, could of, would of, should of Can what we have between July 07 - Sept. 24th on a weekly chart be classified as a cup with small handle?

Edited by skyymaster, 12 October 2007 - 11:23 AM.

[fib_1618]

Can what we have between July 07 - Sept. 24th on a weekly chart be classified as a cup with small handle?

Patterns such as the "cup and handle" are actually "rounding bottom" formations and are best applied to daily price data.

If your question posed is referring to this year, the volume pattern would indicate that the pattern was a simple inverted head and shoulders which gave an upside price objective of 2825 which was met yesterday.

Fib

[skyymaster]

Thank you for your feedback. Take a look at the pattern between May and Sept. 2006. Weekly chart, for the .ixic or the Nasdaq Composite (not Nasdaq 100). On a weekly chart it does not look like H&S. However, I do see what you mean about the current pattern. I guess true handle in a Cup and Handle should correct around 5% at least correct?

[fib_1618]

Take a look at the pattern between May and Sept. 2006. Weekly chart, for the .ixic or the Nasdaq Composite (not Nasdaq 100). On a weekly chart it does not look like H&S.

That would be because it's not an inverted head and shoulders configuration.

The one thing I would say about pattern identification is that just about every single one of them are reflective of daily price pattern data and tend to lose their usefulness the larger or smaller the time frame. You also tend to lose the supply and demand rhythm that make up such patterns in the first place that actually reinforce their same identification as being this or that.

With respect to the time period mentioned in your reply, I would be more inclined to refer to this pattern as a simple correctional trending process to methodically remove the excesses that came before. In other words, not every price pattern sequence has a name to it...sometimes it's more of a way for the market to catch its breath while, in this case, finding a zone in which the majority will find the product fairly, and maybe, undervalued before once again moving in the opposite direction.

As far as what to expect out of any pattern, every geometric price structure has hard and fast rules with regard to price objectives which can range greatly depending on its overall size in relation to the still larger structure. Placing a percentage on what that might be is like putting the cart before the horse and shouldn't be used as a proxy. If the price objective makes up only 5%, it's 5%. If it's more or less, so be it.

And your welcome.

Fib