Amfil Technologies Inc (FUNN)

[User-65225]

What we have been witnessing is an absorption pattern... Each small dip has been getting accumulated and as the loose shares dry up at a level, the Bid moves higher to entice new sellers to fill orders.

We are slowly moving up and pressing into the last bit of overhead resistance before blue skies.

When a stock has a blue sky breakout, it can be very hard to tell where it could top out at and/or when one should rebuy, etc, so having areas in the chart where people can refer too and see where is could breakout from, or where it should hold in the future, is key to attracting buyers at higher and higher levels... especially when its still viewed as a young/risky company

Would any of you feel comfortable trying to get to a location in the Amazon jungle, without a map, guide, etc? That is how TA followers feel when a stock is up thousands of percent/overheated. They look elsewhere, until the indicators come back to earth.

This is the way it is for a lot of $$$ in the markets. They need to see certain things in the chart to feel comfortable buying a stock that is up thousands of percent in just months... That is why the Cup & Handle is considered a "continuation" pattern. It tells us that the long term trend is THE REAL DEAL and its time to rebuy for the next leg... but in order for this all to play out, it depends on how much TA $$$ follows the ticker or will find the chart.

Low volume right before a breakout is also key. It tells us that the heavy profit takers are done... It also makes the volume spikes stand out on the chart again...

As you can see from the above example, the cup is really a rounding of price action near a series of lows. There is a left, base and right side of the cup. One of the key characteristics is volume will be heavy on the left, light in the middle and pick up again on the right side of the cup. When you layer the volume on top of the price action, they both can look like two Us on the chart.

Any who, as the price approaches the creek or top of resistance, the stock will have a minor pullback, thus creating the handle. Once this pullback or handle is complete, we are off to the races.

https://tradingsim.com/blog/how-to-trade-the-cup-and-handle-pattern/