Replies to post #71897 on ajtj99's Market Pulse

[chainik]

Intraday SMH is forming cup and handle identical to GOOG; if SMH goes up and GOOG down from here, would it prove that TA is a bs? (g)

Do you still hold GOOG short or you trade it?

[Newly2b]

Well, it looks like a possible Cw/H, but strictly speaking it is not according to both O'Neil's criteria and Bulkowski's, because:

1) Price should rise a minimum of 30% to left lip, here it doesn't
2) Cup depth should be a minimum 12%, here it isn't
3) Low of handle should be above the 200ma, here it is below

That said, the psychology that creates the pattern is evident here to some extent, but while volume was high on the drop off the left lip, I would prefer to see even higher volume as price rises to the right lip, and here it is only so/so. Nevertheless, it might behave in a similar manner to a true Cw/H, though I wouldn't bet money on it.

BTW, I only trade Cw/H's that appear on Monthly or Weekly charts, rarely on Dailies, never intraday. IMO, these are more reliable over longer timeframes, and notably, both O'Neil and Bulkowski require a minimum duration of 7 weeks, and even then the failure rate is 26%.

So far GOOG does seem to have followed nicely the scenario I outlined in post 116652 on 1/27 on Traders' Coop board and we are now at that lower t/l of the rising channel. Bounce here, or next stop the October gap, what do you think?



All JMO, BWDIK.

Newly