Monday, October 20, 2008

Cup & Handle - Barrick Gold Corporation (USA) (Public, NYSE:ABX)

Yesterday I discussed setting intraday alerts in the comments of Thursday's trades. Here's a good example of setting an alert at the whole $ level after two pivots. The third test of a pivot point is usually the charm. ABX had tested $25.00 within a few cents on Friday and again this morning (tweezer top). I set an alert at $25.00 after price started to retrace lower. It retraced to the 38% level of the previous day's range and moved back towards the base at $25.00, carving out a C&H. Took dual trades on this one in both the trading account and the retirement account. Holding half position in retirement account going into tomorrow.


I found STR on the Trade-Ideas scanner. I traded this as a C&H but took a partial after 1 pt. because it is so extended and testing resistance.

8 comments:

Tyler said...

Jamie,

Always amazing! Thank you for posting so much about the Cup and Handle. I think this is such a powerful setup and I have learned a lot about it from you.

Thanks,
Tyler

Jamie said...

Thanks Tyler,

One of my favorite setups.

Susan said...

Great trades Jamie. A question about the 3 PP. If 2 consecutive candles touch the whole $ number, do you treat them as 1 PP (as in the ABX example)?

bl said...

Nice work. NRG deal brought the utilities out: rri mir cpn aes duk eis ep dyn aep. SPY rallied 4/30 as the above and mkt.

Jamie said...

Thanks Susan,

Yes, I count it as one pivot when they occur consecutively. In this case the long upper shadows implied resistance was too strong. On the third pivot, we had a long NR consolidation leading into the test of resistance which gave the setup much more strength and a lower risk entry point.

Jamie said...

Thanks BL,

Yeah, the energy complex was the place to be today.

Susan said...

Thanks Jamie. I implemented alerts today and even entered a trade based on that. I put my alert a few pennies below the pivot point so that I have some time in hand. Is this method ok? Anyway to make it better or more efficient?

In one of your posts about trendlines, you mention: "the point from which price carves out its highest high must touch the trendline." If a stock is in strong uptrend making higher highs, do you keep on changing the trendlines?

I would really appreciate if you could advice on how to set alerts on fib. retracements. I have used alerts for support and resistance but not very often.

Jamie said...

Susan,

Yes, that's a good method. I usually set alerts for longs on the ask price and for shorts on the bid price.

On the ABX example you could set two alerts, one at $25.00 ie. PP and at 38% retracement of previous day's range around $24.15. Once price moves from 38% to 25% you might want to start scaling in.

With regard to trendlines, the answer is yes. A minor low that produces a higher high, must touch the trendline, so this often means that the trendline must be redrawn.