Pretty standard fair with these two dummy trades. I'm really liking this bear flag pattern on the high volume gap downs. The C&H as most regular readers know, is one of my favorite long patterns. I took a partial on WYNN because I figured the down sloping 50 MA would act as resistance. Took off the balance at the usual 100% fib. extension from the low of the cup to base.
10 comments:
Congrats Jamie !
I played APA and STP today. They had a setup similar to your FWLT trade monday.
I saw WYNN but I thought that the yesterday's low could act like resistance.
Thanks Fred. Nice work on APA and STP.
WYNN was a play on earnings which failed to impress AH. Don't think too many people will be spending big money in Vegas when their worried about the mortgage.
Nice Jamie :)
I have to say, thanks to you, the C&H has been one of my better trading patterns as well.
Thanks Dave,
The nice thing about the C&H pattern is it's easy to spot.
Congrats on the V trade this a.m. It's starting to look stretched on the daily. I'll be watching to see how price reacts if it retests today's high.
Jamie, would you mind explaining how you came to the conclusion that WYNN was forming a C&H pattern?
On the 15 minute chart it does not look like anything. On the 5 minute or lower time frame I can kind of see the pattern but I am confused as why you would use the ORL as the base.
Using the 5 minute time frame:
Are you saying the cup portion is from 9:30am through 9:55am and the entire handle portion is from 10:00am through 12:10pm? If so, does this mean that the handle could in fact take longer to form than the cup?
Or, is the cup portion from 10:00am through 11:50am and the little handle section is 11:55am through 12:10p. If that is the case I would think you would use the low of that "cup" which would be around $101.41.
Hope you can clarify this for me. Thank you.
Anon,
The cup has depth and the handle, presumably has a rounded shallow base. I call it a C&H even though part of the cup is missing because I want to set a target based on a measured move.
If you add the AH from yesterday , it could even pass as an inverted H&S pattern. Either way, the measured move is 100%.
Not all C&H patterns are symmetrical, but it is important to look for volume contraction as the handle forms.
So then you are saying that the handle could be longer than the cup. As in this case, the handle was forming between 10 -> 12?
The ideal is always for orderly, symmetrical patterns. But yes, handles are sometimes as wide or wider than the cup.
Jamie,
Do you encounter more success in C&H with gap ups and less so with gap downs or it doesn't matter?
Dan
Dan,
For me it easier to recognize the pattern on a gap up. Also, there is less resistance which bodes well for the success rate.
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