Cup and handle: Technical side

Tweet

source: http://ammegan.tblog.com

Ever heard some friends who say they are seeing a cup and handle formation?

Weird huh? But what is that cup and handle they talk about?

I am not a full Technical guy but let me enlighten you about this wonder most Technicians and Chartist call CUP AND HANDLE formation. Below is a graph of FPH(First Philippine Holdings)

Here is what our friendly Investopedia.com say  about CUP AND HANDLE:

A cup-and-handle pattern resembles the shape of a tea cup on a chart. This is a bullish continuation pattern where the upward trend has paused, and traded down, but will continue in an upward direction upon the completion of the pattern. This pattern can range from several months to a year, but its general form remains the same. 

Note that a cup and handle pattern is a pattern in which the stock is generally on the uptrend and due to correction or consolidation it dipped down forming a cup. Though there is a deep correction investors who believe in the stock hold onto it thus after the dip it rises back to form the cup part of the pattern.

In our example FPH enjoyed a brief comeback from the cup and handle formation due to the correction that the market is in right now. But if you noticed it there was a small downtrend after the cup formation thus completing the cup and handle.

But lots of chartist have various interpretations and view on a cup and handle formation. Also such formation may take a short period or a long period lasting to months and even years.

Not all cup and handle pattern go to the expected reversals thus I warn anyone who reads the chart to do check it and do some calculations. As always check volume if it confirms it. When a formation is forseen and the volume picks up there is a great likelihood that such pattern will lead to reversal.

Knowing the information in the Philippine Stock Exchange

Tweet

If you have not done it yet please read this post and familiarize yourself with Philippine Stock Exchange's website. Right click here and chose "open in new tab" to go to there website.

Again in this page there are so many financial and investing lingo that you might not understand. Learning these words will help you understand investing so have the effort to search and understand these words. But our lesson here is to help you out how to navigate and get information about Philippine Stock market through PSE's website. On the right side of the webpage you will see a box with the title Market information & PSEi Intraday

A new window pops showing a listing and a graph. Click on the listing under "ALL SHARES" and the PSE website will show you all the listed companies with some important information.

Familiarize yourself with the company names and their Stock symbol. You will be needing this to access the information of companies you are interested in. In the PSE's main page there is a box on the right top "Symbol Lookup" Enter here the symbol of the company you are interested so that you can view important info regarding the company.

 Let's check China Banking Corporation(I'm am not endorsing ChinaBank) use the symbol CHIB.

Chinabank's Stock info page is shown. A graph of the company's daily closing market price is available for you to see the movement of the stock price of the company.

Monitoring your stock's price should be done if you are an investor. When you are an investor time is your ally. You buy stocks of good companies when their price is low and sell them when their price is high. But if you are a trader you are betting that a small rise in price during the trading hours will make or break you. Having information is an edge either one is an investor or a trader of stocks.