| JUL 1995
Trading with the Cup-with-Handle by Gregory Kuhn
V.13:07 (292-297): Trading with the Cup-with-Handle by Gregory Kuhn Here are some more nuances for trading stocks based on the charting pattern called the cup-with-handle pattern introduced by William O'Neil. How much would you pay for a trading system that accurately identified the buying trend of the smart money early enough to profit? Would you spend no more than the annual subscription to a chartbook service? The biggest problem in searching for chart formations is that if you look hard enough at a stock's one-year graph, you're bound to find any formation you want to conform to your bias. But the smart money has a way of leaving subtle footprints in the way some chart patterns form. The cup-with-handle pattern, when combined with price and volume action, is often the result of such footprints. The volume surges that typically accompany the rally days in a sound cup-with-handle base - clues that investors are building a position - don't occur because there are more buyers than sellers; they occur because the buyers are much bigger. The mystique behind the cup-with-handle's basic structure, however, is nothing more than understanding a simple technique - the 1-2-3 change of trend as explained by Victor Sperandeo in Trader Vic: Methods of a Wall Street Master. Sperandeo points out that fortunes are often made by simply identifying a change of trend. Of all the technical indicators and rules I have studied over the years, this single rule is by far the most important I've learned. The 1-2-3 change of trend - hidden within the cup-with-handle - gives a trader the opportunity to get on board a new uptrend at its earliest emerging point. Let's look at the 1-2-3 change of trend as part of the development of the cup-with-handle pattern.
by Gregory J. Kuhn
Technical Analysis of STOCKS & COMMODITIES
The Traders’ Magazine since 1982
has had over 1,226,237 subscribers from 174 different countries.
37,000 Page Traders’ Archive for $89.99
To continue reading, sign-up for trial access to Traders.com and the S&C Archive — 37,000 pages of trading ideas!
After verifying your email address, you will have limited access to the S&C Archive, as well as access to a Digital Edition of S&C, and access to Traders.com Advantage and Working Money for 30 days.
Not a subscriber to Technical Analysis of
STOCKS & COMMODITIES magazine?
Click
here to subscribe, or request
a trial subscription.
Log-in now to view articles from the S&C Archive.
Your Subscriber ID is located at the top of your magazine label, highlighted here in red.
Your last name can be found on the second line, highlighted here in blue.
*If you have a company name on the label, that can also be used. It will appear below your name on the label.
If you do not have a Subscriber ID on your label, you can find it on your statement or renewal form.
For help locating your Subscriber ID number, please call us at 1-800-832-4642 or send an email to Survey@Traders.com. If sending an email, please include your name and mailing address.