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Thread: Cup with high handle?

  1. #1
    Join Date
    Dec 1969
    Location
    New Jersey
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    189

    Cup with high handle?

    Hello Mike,

    I notice on this weeks High Growth list, FB made the cut. Being new to HG investing, I am not familiar with 'cup and high handle' formations. Are these pattern formations more volatile and failure prone than compared to a classic cup with handle? If so, would you employ a bit more room (>7% sell stop from buy point) or instead keep the sell stop tighter?

    Thanks for all you help and quality posts,
    Harry

  2. #2
    Join Date
    Dec 1969
    Location
    Tarzana, CA
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    962
    Quote Originally Posted by Harry View Post
    Hello Mike,

    I notice on this weeks High Growth list, FB made the cut. Being new to HG investing, I am not familiar with 'cup and high handle' formations. Are these pattern formations more volatile and failure prone than compared to a classic cup with handle? If so, would you employ a bit more room (>7% sell stop from buy point) or instead keep the sell stop tighter?

    Thanks for all you help and quality posts,
    Harry
    Harry,

    High handle formations on a cup shaped base are a little more failure prone than the standard cup with handle pattern. A normal handle usually forms a little less than the left hand base high price and it should form in the upper half of the base formation. Early in a new bull market almost all these base patterns can work and we should get more choosy in a late stage bull market (like now). If the market is acting well FB could break out and work but I would place the odds around 50%. The handle is a little more than 5% above the left hand high, about as far as I would go in this market.

    I would prefer to buy FB on a 10-day moving average volume trigger alert if it were to materialize.
    Mike Scott
    Cloverdale, CA

  3. #3
    Join Date
    Dec 1969
    Location
    New Jersey
    Posts
    189
    Thanks Mike!

    Harry

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