| Welcome Guest, please sign in to participate in a discussion. | Search | Active Topics | |
Registered User
Joined: 12/8/2004
Posts: 1,301
|
I have been watching this stock for a couple of weeks now. The left side of the cup started in june 2005, and the right side handle downtrend began in late Feb 2006. According to my charts this is the area for it's turn around. It has given me buy signals 8 times in this area with no results yet. I am waiting for the stock to make it to 6.10 before I buy.
|
|
Registered User
Joined: 11/5/2005
Posts: 180
|
Not that this isn't a buy according to your TA but it's not forming a cup with handle and is not even close. We talked about a cup with handle before and I mentioned William O'Neil as someone that describes it in detail, have you read any of his books? Volume is important and a tight trading range is important too which ACLS doesn't have. ACLS does has not formed a cup with handle - sorry.
I trade the cup with handle confirmation signal allot, last one being TGC and the next being HEC, not busting your bubble just feel its important to understand how a cup with handle works in detail because if a cup with handle breakout fails it can get ugly real quick.
Just my opinion.
Good luck with ACLS
|
|
Registered User
Joined: 4/28/2006
Posts: 5
|
ACLS is currently in a slow sideways-down motion.
I recommend only an entry with higher tops and higher bottoms with the support of a simple moving average of 20 under the price action.
The current high volume will however show some movement (eitheer way) any day now. Once entered (bought), keep a close look at 6.50 - 6.60 to avoid a dead cat bounce on this one.
|
|
Registered User
Joined: 12/8/2004
Posts: 1,301
|
I have read o'neils books. It may not be a typical cup with a handle according to o'neil but it sure broke out exactly like a cup with a handle would break out.
|
|
Registered User
Joined: 12/8/2004
Posts: 1,301
|
And just for the record, here are the rules for a cup with a handle.
The price base should span no less than seven weeks -- from a stock's last intraday high before its correction through the end of the handle. Shorter bases tend to fail.
Most cup-with-handle bases run 10 to 12 weeks, a trait that seems to correspond with the 13-week quarterly reporting period. Many of the biggest advances tend to spring from bases in the 20- to 30-week range. And some price bases can take a year or more to complete. Such long bases usually coincide with bear markets or severe corrections within market sectors.
A normal stock declines 20% to 30% from the pre-correction intraday high to the absolute low of the cup. Steeper declines suggest weakness. During full-blown bear markets, you might accept a 40% or 50% decline if the stock made a huge prior advance.
The downward phase, or left side, of the cup should take at least a couple weeks. You want the correction to really scare out weak shareholders.
Trading volume should drop off during the lows of the cup. That's a sign that selling has dried up. The correction has chased out most everyone who is going to sell. A spike in volume with stock refusing to budge much lower is also a good sign. It indicates buyers are stepping in to support the stock. Volume should pick up as the stock rebounds, then dry up as it forms the handle, again signaling that selling has abated.
* A stock should trade in a fairly tight price range during the handle. The handle should angle downward. The handle should not drift upward or move straight sideways, as marked by the daily price lows. Such upward-wedging handles are failure prone.
* The handle should form in the upper half of the cup. You can calculate the midpoint by adding the pre-correction high to the absolute low. Then divide by two. The middle of the handle should be above the cup's midpoint.
* A stock's Relative Price Strength line, which graphs its share price vs. the S&P 500, should accompany or lead the share price into new high ground. The RS line should not lag the share price into new highs by a significant distance.
* The price should break out of the handle on strong volume, at least 40% to 50% above the 50-day average of a stock's trading volume. The week of the breakout should generate more volume than the prior week.
|
|
Registered User
Joined: 11/5/2005
Posts: 180
|
Nice breakout but I don't think there was a cup with handle formation - just my opinion. None the less good call on ACLS
|
|
Registered User
Joined: 12/8/2004
Posts: 1,301
|
Well I got stopped out, so I didn't get a chance to play. Another one of those lost ones, and I agree, according to the rules the cup fit the criteria, but the handle did not. It was to long.
|
|
|
Guest-1 |