Hey Ben, thanks for the example and at first glance looks textbook as you note. BTW, IBD founder O'Neil is the guy who coined and defined this pattern, stating that 50 years of research shows it to be the most fruitful of all patterns.  Okay, here are most of technical the criteria for an IBD cup/handle:

*Start of cup (12/28/09) must come on heels of prior uptrend of at least 20%.  Pass.
*That prior uptrend must have come on increased green volume.  Pass (note Nov.volume).
*Length of pattern at least 7 weeks.  Pass.
*Depth of cup not to exceed 35%.  Pass.
*Overall lowering of volume along botton of cup relative to left and right side buildups.  Pass.
*Handle at least 5 days.  Pass.
*Handle location in top half of cup depth. Pass.
*Depth of handle not to exceed 12-15%.  Pass.
*Volume in handle lower than its vertical buildup.  Pass.
*Handle located above the 50-day moving average, with 50 above 200.  Pass.
*Breakout of handle on increased volume.  Pass.

I believe that covers most of the pure technical criteria for IBD's cup with handle, but for it to be legit the stock also has to pass O'Neil's fudanmentals and other canslim criteria, and you say it does apparently.

I love O'Neil's books and teachings but I'm not hard core on canslim, but like to implement some  of his stuff into my personal methods, especially his money management and risk methods.

One thing I note on PCLN is that price has made quite a run since Nov. 08 and I have to wonder if its current base isn't a latter stage one that O'neil warns about. Thanks for the exercise, exellent eye Ben!

*Capitalization less than 5 billion.
*Float less than 100 million.
*Short interst for longs less than 20%.
*Institutional support in the green, higher the better, except over 70% or so, i.e. too much ownership.
*Check earnings but give priority to chart action, more reliable imo especially for young companies.
*Check news, i.e. why did price spike on that day?  Years ago I bought a breakout without checking news and saw that it was bought out thus reason for spike, and of course often times price does nothing but trade in extremely tight range for days/weeks until buyout finalizes.

In short I keep it simple on fundies because I plead ignorance on a lot of that stuff.  And the emphasis I place on fudamental components highly influenced on whether I'm playing a stock for a quick swing trade or something longer.  RNN is example where I basically traded it pure technicals. But in end for me the price action on the chart always rules when making buy/sell decisions regardless of so called great fundamentals and news.  Someone in another thread had a great comment by Mr. Worden on why charts trump fundamentals.

Back to IBD's fundmental screen wizard and why I quit using it and went with the current simpler approach.  If you enter all the recommended criteria for canslim  in the screener it would often times yield ZERO results.  And I also passed on some great looking setups in Telechart that went on to great gains, all because the stock came up negative on the IBD canslim screener. 

Statistically speaking a high handle does not have the movement a normal handle would. Check out GFA on a weekly chart and note how the volume is high coming down the left side, low across the bottom, then progressingly rising on the right side on a real flaky double bottom (rt side should fall below left side a few % points), then falls again with the handle and finally a push off the 50d. 

Hopefully we will see a breakout next week on super high volume (best case scenerio). Buy point would be 0.10 above the high point of the handle at 18.91.

Be sure to set your stops in case our best case scenerios do not work out as expected.

My default TC chart is the daily at zoom 3 and first thing that popped was huge volume and down gaps in July last year.  Large muti month mostly sideways action since then is constructive I think. The bounce off of Dec. bottom came on improved volume (seen more easily at zoom 5), and that was doubly good cause price regained the 50ema.  Briefly lost it in Feb but has now regained it.  I first looked at this chart a bit earlier but I had not updated and was thinking the chart would look lot better if price would take out what was shaping up to be possibly a little mini flag.  I updated and see that price has indeed gapped above the Jan. high resistance this morning, apparently on an analyst upgrade.  Almost two hours into the session and the gap is holding but volume is not showing up, so that would be a concern if I were playing it.  Looking at the 5 min. chart the two biggest volume bars are red to the downside, at the open and 10:10 eastern.  But the day is long. Zooming back out I see several resistance areas, the Oct highs, Sept highs, and Aug highs, three successive little humps there.  And finally the 200ema, but it's close to the Aug high resistance, and the 200 sma is lower, fwiw.  If price were to make up to that Aug high and stall it would still be a nice gain from here.  That Aug. high resistance pretty important imo because it filled a big gap there.  Just ready to post this reply and I see two green volume spikes on the five minute at 11:20, largest volume bars of day so far, so maybe it's ready to do something:)  Enjoyed the exercise.

Oh, regarding IPOs.  I don't bother with them myself until they are at least about a year old, sometimes 6 months.  By then the lockup period has expired and patterns have had time to evolve and a better feel for the price action is seen,  moving averages noted for any significance to price action as resistance/support, etc.

Thanks for your help Fpetry. I once read that IPO's follow a pattern and it goes kind of like this...Hit it boys-----

Just kidding. When an IPO is first listed it will gain lots of attention from those that were in the know before the company went public. That is why in most cases you will see that from day one price will usually run-up very fast. The retail traders will catch wind of the stock and jump on board just in time to buy their shares from the "Early Birds" The guys in the know. Once smart money is out of the stock then the retailers start to panic sell as they are left holding the bag.

Once a bottom has formed then we start to see some more interest in the stock. Now with this stock BEAT I noticed a nice Bottom pattern but what really has my interest peaked is the fact that this company has zero debt and 99% institutional support this early in the game.

I did go ahead and buy some shares.

Thanks for your help on this one Fpetry.

The main idea for buying a recent IPO or young company (after it has traded a half year to half dozen years)  and formed a some bases is because it's the young companies of  7 years and less that on average make the big spectacular gains.  Think of a young MSFT or GOOG  vs. an old stodgy stock such as KO or GE.  Of course MSFT is now one of those old stodgy stocks:)

99% inst. support for BEAT?  If you mean insitutional ownership all sources I look at show it at about 66%.  FWIW,  and I can't name specifically where I read it or who stated it, but institutional ownership at 70% or more can be viewed as a negative because the stock is over owned by the big players, i.e. no one left to push it up.  I'm sure that's a generality of course, but something to consider imo.  Good luck with BEAT.

Fpetry, that was always my understanding is that the float meant that these shares are outstanding and are not part of the shares used for special issue. I could be wrong on this as very rarely do I worry about the float unless it is a really low number.