SXX cup and handle breakout

Hi abudawud,

A C&H breakout (or an ascending triangle breakout or a 123-low breakout) ought to be quite powerful since it's really a break above the top of a wave 1 if it occurs after a downtrend. That means it's the main element of a wave 3 in EWT terms.

More simply, if you think about the shape of a cup and handle, the sides get steeper nearer the rim - just look at the steepness of SXX's drop from 37p; the rise back up there ought to be similar.

Incidentally, IF SXX does get to 37p again, then the whole move from 37p down to 12.5p and back to 37p will just be a larger scale cup so we might then expect a retrace in the form of another, larger handle. As we'd expect on a breakout of an all-time high, if and when SXX ever breaks through the larger C&H pattern it should gain real strength so that should also be a powerful breakout with a target in the region of 62p.

That's all speculative of course, but I hope that answers your question.

So cup and handle is king then.

Remo,

SXX currently retreated to below breakout 25.25 is it normal to retest the breakout area on cup and handle patterns

Tight Lines

Hi sirrichard

Its quite normal for a re-test of a breakout point. Thats when your meant to really enter on a re-test with tight stops.
With penny shares you have to be extra careful as false breakouts do occur.
If this can finish above the breakout point by the end of the day then it will be bullish.
DYOR

abudawud wrote: So cup and handle is king then.

Its one of the most powerful patterns out there. If not the most

This could be breaking out of its consolidation triangle today (need to wait for close for confirmation):



dl.dropbox.com/u/20815047/SXXdaily07_01_13.gif

Note that this resistance has formed at the 61.8% retracement of the drop from 37p to 12.5p so a break through here should be significant.