Re: [CANSLIM] cup-without-handle; "tightness" questions

From: Jack Tencza <jtenz@yahoo.com>
Subject: Re: [CANSLIM] cup-without-handle; "tightness" questions
Date: Thu, 8 Aug 2002 17:15:39 -0700 (PDT)

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Charley, thanks for the comments replying to my A/D
comment to Mike Gibbons. I, in error, deleted your
reply. Would you be kind enough to resend it? or...
perhaps someone else if Charley doesn't have a copy of
his reply. 

Many thanks,

Jack

- --- Chazmoore@aol.com wrote:
> Ann: You will probably get several responses to your
> question but let me give 
> it a try.
> 
> 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%.
> 
> 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
> 


=====
Jack

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