| Welcome Guest, please sign in to participate in a discussion. | Search | Active Topics | |
Registered User
Joined: 1/28/2005
Posts: 6,049
|
Traders
Does anyone have recommended lengths for cup with handle scans, double top scans, double bottom scans?
How long should the cup be--- how long should the handle last?
What type of distance should be between peaks in double tops, dips in double bottoms ?
I'm trying to do some work on creating scans for these and would like to know if people have had success with certain lengths.
Thanks
|
|
Registered User
Joined: 12/2/2004
Posts: 1,775
|
diceman, I believe a cup is legit if only for a few weeks or month . Right now I'm long EMKR where I entered Monday on about a one month cup/handle formation. I know ones I've studied in past from seasoned pros tended to show the cups 2 to 3 months in length as most common. I guess like much of trading so much depends on your trading horizon or style. Long term traders or investors might say a one year cup/handle is legit. As a short term trader I think a 2 week cup is legit.
As for double bottoms or W formations, I like to see at least a few weeks and prefer a few months. Good questions you have asked and I'm anxious to see opinions of others.
|
|
Registered User
Joined: 10/7/2004
Posts: 2,126
|
IBD which are one of the biggest players of cups, recommends no less than 14 weeks, althoutgh there is no standard among players.
I have play on occassions cups during daytrading, just taking down the weeks to minutes intervals and they have been for the most part profitable. It is hard to find them in real time, but sometimes are right on your face so you cannot miss them. When they show up I play the pattern.
good luck
|
|
Registered User
Joined: 1/28/2005
Posts: 6,049
|
Its seems like it does not matter what size the cup is. As long as the shape is valid it should give similar results.
I found some work by Thomas Bulkowski that suggests double tops should be closer together. Double tops that are 12 to 14 days apart tend to fall further then double tops that have a wider spacing.
Thanks
|
|
 Gold Customer
Joined: 3/10/2005
Posts: 12
|
Current issue of Technical Analysis of Stocks & Commodities has an article on this subject.
|
|
Registered User
Joined: 10/7/2004
Posts: 286
|
Here's an approach to finding CUP formations based on a 70 day time frame or about 14 weeks. It takes an assortment of averages that forces a dip in the middle, but also requires that the stock be in a longer term bullish trend.
C>AVGC20 AND AVGC25 > AVGC40 AND AVGC25.35 < AVGC40.35 AND AVGC35 < AVGC70 and avgc50>avgc200
The price must now be above it's 20d aveage. The current 25d must be greater than the 40d, while reguiring 35 days ago, the reverse. To take out stocks that have already taken off, I require that the 35d today has to be less than the 70d. To demand a longer term bullish trend, I set the 50d to be greater than the 200d. With only a 5 day volume $ filter set at 50 or greater on an all stocks field, this scan brings up 18 stocks today (2/11/06).
Pick out the ones that peaked around the first of November, or about 79 days ago. These are a few of the stocks in today's scan that peaked in the beginning of November and look like prospective 14 Week CUP formations: BRLC, BTUI, CCRT, HCC, LCUT, LWSN, NURO, and VTIV.
Sincerely,
jynkin
|
|
Registered User
Joined: 10/7/2004
Posts: 286
|
...should say, "or about 70 days ago". not 70 days ago.
|
|
Registered User
Joined: 12/2/2004
Posts: 1,775
|
BRLC, I went long on it Thursday at 5.56. But I didn't note a cup/handle as reason for entering, but because of volume past two weeks and then Thursdays high volume break of 5-day base as buy signal. Only cup I see is what I would call a sloppy cup.
|
|
Registered User
Joined: 2/28/2005
Posts: 825
|
QUOTE (jynkin)
Here's an approach to finding CUP formations based on a 70 day time frame or about 14 weeks. It takes an assortment of averages that forces a dip in the middle, but also requires that the stock be in a longer term bullish trend.
C>AVGC20 AND AVGC25 > AVGC40 AND AVGC25.35 < AVGC40.35 AND AVGC35 < AVGC70 and avgc50>avgc200
Sincerely,
jynkin
This produces a very good scan. Thank you for sharing it.
One question: If I wanted to go further out with this scan - say 140 days - Would I change the AVGC70 to AVGC140 then? Is that where it happens?
Do you suppose the scan would be as reliable over a longer term? Even up to say a couple of years?
TIA
|
|
Registered User
Joined: 1/28/2005
Posts: 6,049
|
alindsley
Quote:"Would I change the AVGC70 to AVGC140 then?"
I think you will need more adjustment than that. It is also looking
at how the moving averages relate back in time.
As a quick try. I put it into a percent true indicator and sorted by actual
value on a 2day timeframe and 3 day timeframe.
(figuring this would give longer cup lengths than the close)
I found no 2 day cups on the 3 day it gave me
SHLD
SKS
DPL
CHD
Thanks
Good Luck
|
|
Worden Trainer
Joined: 10/1/2004
Posts: 18,819
|
I present a neat method for cup and handle here:
Cup with a handle formation
I present an interesting method for dbl tops/bottoms here:
Double top/bottom trend
- Craig
Here to Help!
|
|
|
Guest-1 |