If You Trade Breakouts, You’ll Like This One

• March 25, 2003
• Chris Tyler

 

Many technicians know of the power of
the Cup & Handle on the daily time frame. For intraday traders the
pattern can also represent an attractive way to play breakouts.
Quite often this opportunity happens on the smaller time frames, as a reversal
trade through prior highs.

10:30:01

Intraday
Setup Alert

From the Nightly Daytraders
Report Yahoo (YHOO)
has formed an extended High level intraday Cup & Handle. Triggers for breakouts
from the handle pivot are established at 23.79. The stock is up .40 at 23.75.

 

 

Yahoo, although down in yesterday’s session, had
shown enough resilience in a day marked by large percentage losses to make it on
to the Institutional Favorite list from my nightly report. This in of itself
doesn’t trigger an execution on the opening bell, but it does put it on our
monitor for potential follow-thru action. 

You can see what happened in Tuesday morning’s
session. The stock was once again demonstrating relative strength by taking out
Monay’s high. This is solid action by itself, and depending on how you trade
technically, this might have triggered an entry. I personally like to wait for a
pattern develop. Sometimes I end up forfeiting some gains, but in other
instances it keeps me out of trouble. This is part of what I consider my
tradable edge, and if they say a picture is worth a thousand words, the Cup
& Handle is one pattern worth waiting for.

Chris Tyler