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I'm trying to figure out how to computerize it - but so far dont' have any
rigorous backtest results. Based on what I've seen over the years I'd say
they all look more or less the same but the scale varies considerably.
Long-term cup-and-handles like this one can be correspondingly "deep". They
all should be relatively smooth and "dished-out" in appearance on the time
frame you're looking at, as opposed to chopping around.
Based on what I've observed the MOST important thing is the so-called
"handle" formation leading to the breakout. Just like O'Neil says, it needs
to show volume dry-up alongs the lows (ramping down after those pulses of
accumulation would be nice) and above all not be too deep. If it is, the
price will have to move too far to break out and will probably reverse.
rgds phil
----- Original Message -----
From: M. Simms <prosys@xxxxxxxxxxxxxxxx>
To: Phil Lane <patterntrader@xxxxxxxxxx>
Cc: Omega-List <omega-list@xxxxxxxxxx>
Sent: Monday, February 07, 2000 9:41 AM
Subject: RE: STK - chart pattern to die for
> Phil - love this "new wave" pattern....developed by William O'Neill....
> but have you back-tested it for reliability and for structural variance
> sensitivity...i.e. min/max length of handle, proportion of cup width and
> height, etc. etc.
>
>
>
> > -----Original Message-----
> > From: Phil Lane [mailto:patterntrader@xxxxxxxxxx]
> > Sent: Sunday, February 06, 2000 7:52 PM
> > To: realtraders@xxxxxxxxxxxxxxx
> > Cc: omega-list@xxxxxxxxxx
> > Subject: STK - chart pattern to die for
> >
> >
> > ICCSA is looking pretty interesting. The yellow line is the
> > former all-time
> > high - the stock just recently started breaking out.
> >
> > On the weekly chart you will note the tremendous swell in volume
> > as it comes
> > up to it's former all-time high. It's formed a classic "cup-and-handle"
> > basing pattern, as shown (roughly) by the purple curves. There's a
> > cup-and-hande within the main cup, shown in cyan. A classic
> > self-replicating
> > pattern.
> >
> > The daily chart focuses on the current "handle" formation. Arrows mark
key
> > accumulation days coming off dried-out volume lows. The volume
> > pattern shows
> > the characteristic "ramping down" behavior on the pullbacks.
> >
> > All the signs are present for a big move to come.
> >
> > fwiw, phil
> > http://www.patterntrader.com
> >
>
>
>
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