TDC Double Cup & Handle?! Strong case for breakout
Updated
Over the past year and a half TDC has formed what looks like a double cup and handle, where the handle for the first cup&handle formation is the cup for the 2nd cup&handle.
Supporting Information:
- Formation began with a large gap down from $36.12 to $33.03 on 8/6/15
- A strong resistance/support line (currently support) at about $30.70, which also constitutes a 38.2% fib retrace from TDC's high on 2/9/17 at $33.32
- From TDC's low of $21.98 in January of last year, the stock pulled back then bounced nicely after retracing 61.8 % (fib)
- Both Stoch and CCI are currently in oversold territory
- Since TDC began consolidating on 2/13, volume has been lower on down days and higher on up days, most recently showing declining volume as the stock has dropped
- 50 day MA could provide additional support when it catches up to the stock
I would recommend waiting until there is a clear breakout of this small pullback, preferably on strong volume (at least higher than average) with a close at or near its daily high. If this happens I would expect the stock to retest its high (between $33.00-$33.30), probably consolidating just under resistance until it finally breaks out. After a breakout above $33.30, next resistance would be after the stock closes the gap created on 8/6/15, with resistance between $35.80 and $36.12
And as always, make sure you have a stop loss in place, which I would place below current support between $30.50 & $30.30 and adjust up if the breakout occurs.
Supporting Information:
- Formation began with a large gap down from $36.12 to $33.03 on 8/6/15
- A strong resistance/support line (currently support) at about $30.70, which also constitutes a 38.2% fib retrace from TDC's high on 2/9/17 at $33.32
- From TDC's low of $21.98 in January of last year, the stock pulled back then bounced nicely after retracing 61.8 % (fib)
- Both Stoch and CCI are currently in oversold territory
- Since TDC began consolidating on 2/13, volume has been lower on down days and higher on up days, most recently showing declining volume as the stock has dropped
- 50 day MA could provide additional support when it catches up to the stock
I would recommend waiting until there is a clear breakout of this small pullback, preferably on strong volume (at least higher than average) with a close at or near its daily high. If this happens I would expect the stock to retest its high (between $33.00-$33.30), probably consolidating just under resistance until it finally breaks out. After a breakout above $33.30, next resistance would be after the stock closes the gap created on 8/6/15, with resistance between $35.80 and $36.12
And as always, make sure you have a stop loss in place, which I would place below current support between $30.50 & $30.30 and adjust up if the breakout occurs.
Note
Note
After a drop, this stock has bounced back nicely, the chart above shows it breaking above the cup handle (which is in the form of a bullish flag) but I would be cautious here, volume looks pretty dismal today. So unless we have an incredibly strong finish, I think we should wait a day to see if we get a supplementing bullish candlestick tomorrow.
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