Go to Jeff Salisbury LWGate Home Page.From: "Ann" <annholly@attbi.com>
Subject: Re: [CANSLIM] cup-without-handle; "tightness" questions
Date: Wed, 7 Aug 2002 12:14:46 -0400
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This is a multi-part message in MIME format. - ------=_NextPart_000_003A_01C23E0C.053CDE40 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Charley, Maybe I didn't form my question right. How do I know, as the cup forms = its right side and approaches the previous high, whether it's going to = be a cup with a handle or without a handle? What if I am waiting for a = handle to form, but it doesn't form and goes straight to breaking out? = Then it has formed a cup-without-handle, but I have missed the breakout. = Or do you just have to be there at the time it is breaking out or catch = it within 5%? Or I might think that a stock is forming a cup-without-handle, buy it, = and then find out that it still has to form a handle. Am I missing something? Thanks for your response, though. Ann ----- Original Message -----=20 From: Chazmoore@aol.com=20 To: canslim@lists.xmission.com=20 Sent: Wednesday, August 07, 2002 11:54 AM Subject: Re: [CANSLIM] cup-without-handle; "tightness" questions Ann: You will probably get several responses to your question but let = me give it a try.=20 The left side of the cup forms when the upward price pressure hits a = point of resistance; that is to say the sellers begin to out number the = buyers. The stock price falls, and may continue to fall, or move = sideways, for many months. At some point the buyers once again find the = stock price attractive and begin buying. Volume increases as the price = rises. As the price increases it crosses an important mid point that is = half the distance between the left side lip and the current low. (If the = price does not cross the mid point you cannot have a c/h formation.) As = the price approaches the height of the left side lip, it will once again = hit a level of resistance and begin to fall. The sellers once again = outnumber the buyers. This time however the volume is low and begins to = dry up. This tells us that the sellers are just about finished but the = buyers are lurking in the background waiting to pounce. On the chart = this appears as a downward turning line we call the handle. After a week = or two the buyers begin to come back in and the price heads north. Now = we see a strong increase in volume and we wait for our buy signal. When = the price exceeds the lip formed by the right side of the cup by .10, it = is safe to buy. It continues to be a safe buy until the price exceeds = this pivot point by 5%.=20 I hope this helps. Be sure to refer to the new tool Mike has made = available to us since it clearly describes each part of the cup/handle = on the diagram. Charley=20 - ------=_NextPart_000_003A_01C23E0C.053CDE40 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable <!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> <HTML><HEAD> <META http-equiv=3DContent-Type content=3D"text/html; = charset=3Diso-8859-1"> <META content=3D"MSHTML 6.00.2600.0" name=3DGENERATOR> <STYLE></STYLE> </HEAD> <BODY bgColor=3D#ffffff> <DIV><FONT size=3D2>Charley,</FONT></DIV> <DIV><FONT size=3D2></FONT> </DIV> <DIV><FONT size=3D2>Maybe I didn't form my question right. How do I = know, as the=20 cup forms its right side and approaches the previous high, whether=20 it's going to be a cup with a handle or without a handle? What = if I am=20 waiting for a handle to form, but it doesn't form and goes straight to = breaking=20 out? Then it has formed a cup-without-handle, but I have missed the = breakout. Or=20 do you just have to be there at the time it is breaking out or catch it = within=20 5%?</FONT></DIV> <DIV><FONT size=3D2></FONT> </DIV> <DIV><FONT size=3D2>Or I might think that a stock is forming a = cup-without-handle,=20 buy it, and then find out that it still has to form a = handle.</FONT></DIV> <DIV><FONT size=3D2></FONT> </DIV> <DIV><FONT size=3D2>Am I missing something?</FONT></DIV> <DIV><FONT size=3D2></FONT> </DIV> <DIV><FONT size=3D2>Thanks for your response, though.</FONT></DIV> <DIV><FONT size=3D2>Ann</FONT></DIV> <BLOCKQUOTE=20 style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; = BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px"> <DIV style=3D"FONT: 10pt arial">----- Original Message ----- </DIV> <DIV=20 style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: = black"><B>From:</B>=20 <A title=3DChazmoore@aol.com=20 href=3D"mailto:Chazmoore@aol.com">Chazmoore@aol.com</A> </DIV> <DIV style=3D"FONT: 10pt arial"><B>To:</B> <A = title=3Dcanslim@lists.xmission.com=20 = href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>= </DIV> <DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Wednesday, August 07, = 2002 11:54=20 AM</DIV> <DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: [CANSLIM]=20 cup-without-handle; "tightness" questions</DIV> <DIV><BR></DIV><FONT face=3Darial,helvetica><FONT size=3D2>Ann: You = will probably=20 get several responses to your question but let me give it a try. = <BR><BR>The=20 left side of the cup forms when the upward price pressure hits a point = of=20 resistance; that is to say the sellers begin to out number the buyers. = The=20 stock price falls, and may continue to fall, or move sideways, for = many=20 months. At some point the buyers once again find the stock price = attractive=20 and begin buying. Volume increases as the price rises. As the price = increases=20 it crosses an important mid point that is half the distance between = the left=20 side lip and the current low. (If the price does not cross the mid = point you=20 cannot have a c/h formation.) As the price approaches the height of = the left=20 side lip, it will once again hit a level of resistance and begin to = fall. The=20 sellers once again outnumber the buyers. This time however the volume = is low=20 and begins to dry up. This tells us that the sellers are just about = finished=20 but the buyers are lurking in the background waiting to pounce. On the = chart=20 this appears as a downward turning line we call the handle. After a = week or=20 two the buyers begin to come back in and the price heads north. Now we = see a=20 strong increase in volume and we wait for our buy signal. When the = price=20 exceeds the lip formed by the right side of the cup by .10, it is safe = to buy.=20 It continues to be a safe buy until the price exceeds this pivot point = by 5%.=20 <BR><BR>I hope this helps. Be sure to refer to the new tool Mike has = made=20 available to us since it clearly describes each part of the cup/handle = on the=20 diagram. Charley</FONT> </FONT></BLOCKQUOTE></BODY></HTML> - ------=_NextPart_000_003A_01C23E0C.053CDE40-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email.
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