ACI formed a high quality C&H pattern. On the 15 min. timeframe we see and orderly pattern with 2 IBs on declining volume. On the 5 min. we get a better view of the price and volume contraction as the handle forms.The base of the handle sets up at P and the whole $ number. The target is a measured move or 100% Fib. extension from the low of the cup to the base. The extension is perfect with lots of volume supporting the move, so I decide to partial out at the target and hold the balance for a bigger move. I tighten my stop below the last WRB on the 5 min. timeframe and exit the balance as price approaches R1.
8 comments:
That's a picture perfect C&H--can't believe I missed that one. I was watching ACI in the morning also. It took me a while to switch gears to bull mode after the negative start this morning.
I just checked the S&P and it didn't break up until 11:00, exactly when ACI broke out. What made you look at longs? Are you always looking at shorts and longs and then decide at the last minute? I guess that would be smart the way this market can turn on a dime.
Beautiful trade Jamie. The perfect C&H find!
I am a very visual person so for me another simple way of identifying the price and volume contraction you talk about is by looking at the overall shape created by the volume bars in the volume indicator pane while the C&H is taking shape. IMHO the best C&H takes place when the shape of the volume bars also resembles a C&H (or contiguous bowls); like in your ACI trade.
Thanks for sharing the chart!
Rick,
I shorted AKAM but it carved 2 WRBs with a long lower shadows and felt like it might reverse, so I started looking for longs. I just started going through my WL alphabetically and spotted ACI.
SOHU provided a similar C&H opportunity :)
Thanks Anarco,
That's right. I didn't know the correct terminology but contiguous bowls sounds good. This pattern rocks. Wish I could find one everyday.
Dave,
SOHU was perfect. Tweezer bottom reversal and a nice handle at the round $ number.
Jamie can you clarify something.
"The base of the handle sets up at P and the whole $ number." - I assume you are talking about $45? I do not see pivot P at or around $45, it actually comes up around $46 on my chart. Where you referring to pivot point P or some trendline you found on a longer time frame. I just want to make sure my pivot calculations are accurate.
Also, do you place any significance on the fact that the 6/15 carves out a NR7 (not sure if the low volume requirement has been met though)
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