There is a textbook cup and handle pattern forming, which a beautifully rounded bottom. We are now at the handle stage, which is forming at the top of the cup. The handle could last for a few more weeks yet, but as it has already been forming for a month, a breakout soon is likely. Volume was low as the price retreated and remained low at the base, but increased dramatically as prices rose to form the cup.
Buy: Look for a breakout from the top trend line of the handle - at above 27 cents. Less aggressive traders should avoid buying upon breakout in case of failure, and should instead enter the stock once prices close above the top trend line and subsequently retest the upper trend line. However, there is a risk of missing the trade if prices fail to retreat.
Stop: Place a stop just below the upper trend line - at around 25 cents. More aggressive traders may wish to place their stops lower, at below the handle.
Target: 57 cents
Buy: Look for a breakout from the top trend line of the handle - at above 27 cents. Less aggressive traders should avoid buying upon breakout in case of failure, and should instead enter the stock once prices close above the top trend line and subsequently retest the upper trend line. However, there is a risk of missing the trade if prices fail to retreat.
Stop: Place a stop just below the upper trend line - at around 25 cents. More aggressive traders may wish to place their stops lower, at below the handle.
Target: 57 cents
評論:
For disclosure, I have exited the trade today due to the bearish outlook on the general stock market, which is likely to overwhelm even the most promising patterns