Saucer pattern/Rounding bottom stocks

[RichKid]

CUE flared up on very high volume, new news from Jeruk, final results yet to be known but looking positive, hopefully next week will see an update. Oyong shows further upside potential and will support stock for this year imo. Support 29/30c and resistance 35c (big range). Obviously the market is very sensitive to the near term Jeruk estimate.

 

[doctorj]

Would have been nice to notice the breakout on 30/12, but like you I missed it.

 

[tech/a]

Found it on 30/12 but traded it another way no relation to Cup and Handle

http://www.reefcap.com/ubb/Forum48/HTML/000024-2.html

 

[doctorj]

Yea, I'm a long time lurker around the traps and was enjoying that thread before it petered out.

Trading spec stocks is certainly a lot more fun and gives me something to do while tending to the longer holds. How did you go in finding a way to successfully trade speccies mechanically?

 

[tech/a]

Think Ill revive a trading short term speccie thread here seems more are involved.Reef died (That thread) I think as thats all Im trading short term, which have become medium!,and no one else joined in with their trades.

 

[doctorj]

I'll definately join in. Starting a new position on Monday, but I should be able to make time.

 

[RichKid]

Found it on 30/12 but traded it another way no relation to Cup and Handle

http://www.reefcap.com/ubb/Forum48/HTML/000024-2.html

The completion of this move is what is on my mind now, may be a handle or may end up falling back to 25c. A lot hanging on that Jeruk estimate.

 

[RichKid]

Nice vol pickup again, seems to foreshadow an annoucement- currently in trading halt pending release. Let's see what it is, maybe an estimate of when work will be completed. Santos hasn't released any definite dates. CUE still ranging between 30 and 35c. Looking a bit roundish, will have to watch carefully to make sure this doesn't reverse. Lots of black candles.

.....Ok last quarter Activities report is what it is.

 

[RichKid]

Okay, 3D seismic from SANTOS is the next major news to expect. Wont be much happening for a few months. Let's see if this pattern is a rounding turn and if prices will settle lower. Still can't close above 35c. I'm bearish short term but this is a very volatile stock so I'm watching that price level. Pattern may be a handle about to develop.

 

[RichKid]

CUE in trading halt, wonder what it is this time. Last one was a placement. Maybe another one before the sp falls away or maybe just another deal, don't know of any exploration results or the like that are pending release. Anyone have a clue as to what it may be? We may know by the end of the day (or Monday).

27 January 2005
CUE ENERGY RESOURCES LIMITED
TRADING HALT
The securities of Cue Energy Resources Limited (the “Company”) will be
placed in pre-open at the request of the Company, pending the release of
an announcement by the Company. Unless ASX decides otherwise, the
securities will remain in pre-open until the earlier of the commencement of
normal trading on Monday 31 January 2005 or when the announcement is
released to the market.
Security Code: CUE

 

[RichKid]

31 Jan 2005 9.23AM

Share Placement
The shareholders of Cue Energy authorized a placement of up 100 million ordinary shares at the Annual General Meeting of the Company held on 26 November 2004.
The Company is pleased to announce that a placement is being made of up to 60 million ordinary shares at A30 cents. The monies raised will be utilised to fund the recently announced acquisition of an interest in the Maari oil field in New Zealand, project developments and augment working capital.
...

Well, if the last placement was anything to go buy prices should dip below 30 before long, maybe to 28c. But who know may go further or just hang around above 30. No trading yet and I don't have live feeds so I can't see the depth live.

 

[RichKid]

Looks like that's the end of the saucer pattern attempt for CUE, not even a cup and handle judging by this fall. Looks like it's searching for support at 25c, minor rounding top completed.

Anyone see other candidates for this thread? (see the first few posts for criteria).

Btw, I've rejected RRS (Range Resources) as it has broken the rounding bottom trend line and looks like it's going down or sideways.

 

[canny]

Rich Kid - I've just done a quick price and volume search, looking at the daily charts for a 'rough' emerging saucer pattern.
Have a look at these and let me know if they may be in the zone? I particularly dislike management of a couple of these - but that's irrelevant - we're looking for an upward trending pattern that hasn't gone too far, or is only just starting.
ASC, CUO, ERG, PNO, TAS, TIR

 

[RichKid]

Rich Kid - I've just done a quick price and volume search, looking at the daily charts for a 'rough' emerging saucer pattern.
Have a look at these and let me know if they may be in the zone? I particularly dislike management of a couple of these - but that's irrelevant - we're looking for an upward trending pattern that hasn't gone too far, or is only just starting.
ASC, CUO, ERG, PNO, TAS, TIR

Thanks Canny! Just quickly from memory (and the ERG thread) I doubt ERG qualifies, it's really rare to find a typical pattern. But once you do success is far more likely than for most other patterns- very reliable (as far as TA goes anyway). I think Tech picked PNO for last months tipping comp, a breakout stock.
Will check out the others soon, just a bit tied up atm. If you have charts feel free to post as it's quicker to pick em that way. I'm messing around with some free charting software off Incrediblecharts.com but it's a bit of a pain to post accurately. Also, go carefully through this thread to see if each one meets the criteria. I'm a beginner in TA so constructive criticism is more than welcome.

PS Be careful to distinguish bw parabolic uptrends and saucer bottoms, they are different imo- the latter is defined more strictly (look for volume pattern and 'lid' to saucer to use as resistance/breakout level).

 

[RichKid]

Hi Canny,
I've checked the other stocks you mentioned. Not even close unfortunately, not worth a second look imho for this thread. Please see the first two pages of this thread for some example charts, they are hard to pick but not that hard! (If you're in any of those stocks you mentioned or want to be, then good luck with it).

 

[RichKid]

D'oh!!! Missed CUE, had an eye on it but just missed it recently. I think I need to do much more research on this pattern and try to trade it technically, my mind was biased by looking at the oil price and it's effect on CUE. Oh well, good experience.

 

[GreatPig]

RichKid,

As per your request in the other thread, here are a couple of rounded bottoms I bought into that failed (or at least didn't go very far).

With MMX I sold after it dropped through my bottom line.

With PEM I avoided selling after the first drop at the end of the triangle, but then sold on the retreat shortly afterwards - a couple of days before it bottomed out. While it is currently higher than then, it hasn't really done anything spectacular.

QAD I've posted before, and while it subsequently rose again after I sold, when I look at the shallow saucer, I calculate its target at around 6.3 or 6.4 cents, which is about where it peaked just before I sold. So I don't consider that one a failure as such.

Cheers,
GP

 

[RichKid]

RichKid,

As per your request in the other thread, here are a couple of rounded bottoms I bought into that failed (or at least didn't go very far).

With MMX I sold after it dropped through my bottom line.

With PEM I avoided selling after the first drop at the end of the triangle, but then sold on the retreat shortly afterwards - a couple of days before it bottomed out. While it is currently higher than then, it hasn't really done anything spectacular.

QAD I've posted before, and while it subsequently rose again after I sold, when I look at the shallow saucer, I calculate its target at around 6.3 or 6.4 cents, which is about where it peaked just before I sold. So I don't consider that one a failure as such.

Cheers,
GP

Hi GP,
Thanks for that, some well spotted patterns, I love studying these! Mainly because of the high reward for successful patterns. One thing that's missing that I personally love to see for confirmation is volume- but I'm just a newbie and I've heard some people don't even look at volume. What's also interesting is the different formations after reaching the right lip. When I say 'you' here I mean the hypothetical trader. I'm trying to imagine (pretend) that I'm looking at part of the chart in real time without seeing the action to the right of the chart.

The genius of hindsight:
In the first chart, MMX, if you were a conservative trader you'd have bought on a bullish breach of the triangle- which means entry would not have been triggerred. In fact personally I may have been stopped out at about breakeven or maybe not even enered as it ran so fast early that the risk/reward would have blown out- has happened to me before, prices then just give me the cold shoulder and scoot away upwards! Perhaps a higher risk strategy wih these things is to bet very small and buy on the first swing up off the pivot with a wide stop- not my style but an option, don't think it's a profitable tactic on its own.

PEM- a conservative entry via the pennant/triangle would have seen you being stopped out imo. I've been watching PEM and it doesn't seem to have the classic vol pattern, I see it more as a traditional support/resistance play now. Again my lines may be drawn different to yours so my entry and risk calculations would be different. I think PEM may have much more upside left.

QAD looks the same in terms of conservative entry. You would have missed out on some profit by waiting for better confirmation but that would have meant risking less and winning less. My measurement for minimum target would have been difficult, would have depended on which saucer I chose to enter, there would have been a few different resistance levels to look at- familiar problem with this type of messy, complex saucer imo.

Of course there is no indication of where you entered so all this is academic as you may have had a better risk reward combination. All in all those look like great charts to me, again we seem to see different support/resistance levels and depending on liquidity and volume/depth some of us may not even have entered (and hence missed out on profits) but I think it's a valid and highly profitable pattern (as opposed to something like a H&S which is just a joke in terms of reliability). I like to take more than one bite at high reward patterns like this. What's hard is keeping the risk low while finding adequate entry/stop levels- a lot depends on how we define the support/resistance levels and whether we want to be aggressive or conservative.

All that goes to show that we can be looking at the same pattern and recognising it for what it is (in the TA theory books) but trading it completely differently due to some of the factors mentioned above.

Eitherway if we'd both taken the trades above we may have ended up with similar outcomes. What do you think? Have you had similar experiences?

 

[GreatPig]

there is no indication of where you entered

With PEM and QAD, I entered near the right-hand edge of the saucer (12/8 for PEM and 24/8 for QAD). For PEM I made a 1.5 cent loss. For QAD, a 0.8 cent gain (the loss on PEM was larger than the gain on QAD dollar-wise).

With MMX I made multiple trades, as indicated in the attached chart. With the first sale, I made a moderate profit (about $2.5K). After the second two sales, I ended up with a small profit (about $290).

So while I think MMX turned into a failure as a rounded bottom pattern, I still managed to trade it for a profit.

If only I could always be that lucky

Eitherway if we'd both taken the trades above we may have ended up with similar outcomes.

Possibly, but I'm sure everyone has different ideas about ideal entry and exit points for these sorts of patterns, so your trades would likely have been totally different to mine.

With something like MMX, where there's no obvious run up out of the pattern (except for those couple of gap days leading into the triangle, but they were short and sweet), it would have been very easy to trade it differently and make a loss. In this case, I think my choice of trades being successful was more due to good fortune than skillful selection. If I did the same thing again a few times, I would quite possibly make a loss each time.

Cheers,
GP

 

[Kauri]

Entered LEI on a developing saucer/cup pattern, but it seems it may have fallen in a hole. ( 25 Oct. at $14.50 )