This is called a cup-and-handle pattern by technical analysts. It USUALLY foretells of a explosive up-move in a stock price, time will tell. I just wanted to post it here because it’s a beautiful thing, I mean this chart is “perfect” in a technical analysis sense.
One presumes that an “extremely bullish chart pattern” which may or may not signal a coming “explosive up-move” would be the only basis on which to justify buying stock in a company that has lost money since it was founded, does not pay a dividend, and last month said operating costs are expected to exceed sales “in the foreseeable future” as it posted a quarterly net loss about five times larger than a year earlier.
Just MHO, but Can’t Recommend A Purchase.
That chart looks like the gold chart has for the past 12 years. ccwaterback it’s really important to understand the psychology behind the pattern rather than just be able to identify it. I could give you 40 different scenarios as to how that market action could be bearish. The most promising action is within the last 5 days. What was the news stories concurrent with those two two-day rallies?
But you see, that’s why most people don’t know how to make money in the stock market, they base their decisions on what a company DID rather than what it can DO. Stock prices are driven by future prospects, not buy past history.
I agree, this is a high risk stock, but it could double in a couple weeks. It just depends where your risk/reward comfort zone lies, yours seems to be with the IBMs and GEs, and there is absolutely nothing wrong with that.
Here’s the latest news articles:
When I was in the investment industry, I discovered technical analysis. It struck me as one of the stupidest things I’d ever heard of (right up there with textual analysis of of books, where they compare the minor variations* of each edition as though it actually meant something.)
My opinion was confirmed when someone pointed out that if you plotted all the digits of pi (which are known to have a totally random pattern), you’d find several of the “head and shoulders” pattern that technical analysts think are so important.
I suspect plotting any list of random numbers will reveal all the patterns that technical analysts insist mean something.
*On the level of “The first edition has a comma after this, and the word “amateur” is misspelled in the fifth edition.”
I do agree, on it’s own TA is basically worthless. But you take a little TA, and little FA, check the news, watch the volume, check the number of shares outstanding, add water and mix. There’s NO method that’s fool-proof in the market simply because stock prices can be so affected by the morning newscast.
wonders why you’re no longer in the investment industry
I don’t know of a single successful trader (and I know most of them) who doesn’t use technical analysis to some degree. The psychology behind the pattern must be present and patterns can’t be assessed in a vacuum.
Friggin TASR, is this thing ever going to top-out?
Notice there was a 3:1 split too.
It looks like it’s about to go on an 11 day sprint. Those markets that creep towards an old high with small range days and then gap higher are a great R/R trade. Buy it and risk the low from 2 days ago. But I’m a futures trader and they trade differently than stocks.
I don’t what kind of trader I am. A wacky-short-term-momentum-breakout-micro-cap-trader I guess. I try to find the ones near the boiling point, test the water with a buy, then double up if it feels right, wait a couple weeks, hope for at least a 1/2 point, then close out. It ain’t pretty, but it works for me.
CC, the techs for that stock aren’t as good as they look - note that the handle recovery is on the basis of steadily falling volumes. If the volumes were rising as the price does, you’d expect a breakout high. If the volumes are steadily dropping on that sort of shallow rise, you’re expecting a breakout low.
If I were investing in it (which I’m not), I’d be looking to buy puts.
Of course, I’m NOT a qualified financial advisor, this is intended as a hypothetical exercise and should NOT be relied on as an indicator of future performance, and should NOT be utilised as applicable to any investor without consideration of their own investment needs and preferences.
It looks like the volume descended into 3/25, but has picked up lately.
Since I tend to pick low-float issues, I have to gamble and get in before any major volume spike, otherwise I lose the quick bid/ask jump.
You can’t chase these issues, they will spike and tumble right back down. I’m not a buy-and-holder, I buy, and as quickly as possible, say bye-bye.
ccwaterback, I’m glad the word “gamble” finally popped up in one of your posts, although I had thought it would appear in the context of describing your overall strategy, rather than merely selecting an entry point. If you want to chase momentum stocks based on specious rationalizations about company prospects in the hope of selling the shares to someone else at a higher price, that is your business. However, let us recognize this as the outright gambling that it is and not dress it up as anything else, such as investment or even “how to make money in the stock market.”
Yes, yes, yes, exactly. I’m not advocating anyone use this strategy.
But, I have been “investing” for about 30 years now. I think the first 20 or so years I made about 20% on my investments. Then came the crash of 2000, that pretty much wiped out all of my gains. Since that time I have taken this short-term, highly-speculative approach and it has paid off well for me, so well in fact that I have far surpassed the gains I obtained in my first 20 years of investing. So I seem to have found a niche in the market where I can consistently make money, and as long as I keep making money doing what I am doing, I’ll be a happy camper.
Yes indeed, I wouldn’t label what I do as investing. I trade, I speculate, I gamble.
People that trade stocks a lot seems to complain about the MM (market makers) all the time. It seems to me the MM work against each other, they are trying to make a buck too. But, are there ever times they collaborate with each other to “manipulate” at stock price?
Here’s an example. Say a stock is on a bull run. After a day or so, volume dries up, a lot of times you will see the bid drop considerable lower than the ask. A lot of traders see this as “taking out the stops”, or MM manipulating the price down so they can grab some shares cheaper (knowing the stock is going to continue its bull run soon). Sometimes I think this paranoia is a lot of bunk, other times I think it’s true. There are many other scenarios that can be construed as MM manipulation too.
Happy trading to you, CC. I just hope you can tell the difference between a cup-and-handle and a dead-cat-bounce.
Usually a dead-cat-bounce only lasts a day or two at most. Always have to use the modifiers when talking about the market though (usually, sometimes, almost always, etc.)
