DGX - Cup With Handle
I. Analysis
1. Text book cup with handle formed on the daily timeframe;
2. Volume increase at the right side of cup, volume decrease at the handle formation;
3. Stock in a short term uptrend as 20MA shows;
4. Price action wise, the price should have bounce way lower after that highs breakout and rejection right? Well, buyers are willing to buy near this resistance level. This is a good sign of strength. Our bias is long;
5. Also deem this resistance level as a value zone. A stop loss set below handle's low and hit would invalidate the trade. On the upside the depth of the cup entails a relatively big profit potential;
5. Bullish engulfing pattern formed in the last session could be the entry trigger we were looking for, for more aggressive traders;
II. Trade
1. More aggressive traders would go long on the next candle using the bullish engulfing pattern as an entry. More conservative traders would go long on the breakout and hold of the previous highs;
2. SL 1 ATR below low of the handle;
3. TP tracing swing lows or at a cross below 20MA for trend followers and at the next swing high for more pain averse traders;
Cheers
Ruben
1. Text book cup with handle formed on the daily timeframe;
2. Volume increase at the right side of cup, volume decrease at the handle formation;
3. Stock in a short term uptrend as 20MA shows;
4. Price action wise, the price should have bounce way lower after that highs breakout and rejection right? Well, buyers are willing to buy near this resistance level. This is a good sign of strength. Our bias is long;
5. Also deem this resistance level as a value zone. A stop loss set below handle's low and hit would invalidate the trade. On the upside the depth of the cup entails a relatively big profit potential;
5. Bullish engulfing pattern formed in the last session could be the entry trigger we were looking for, for more aggressive traders;
II. Trade
1. More aggressive traders would go long on the next candle using the bullish engulfing pattern as an entry. More conservative traders would go long on the breakout and hold of the previous highs;
2. SL 1 ATR below low of the handle;
3. TP tracing swing lows or at a cross below 20MA for trend followers and at the next swing high for more pain averse traders;
Cheers
Ruben
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.