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Bill says that L is a buy here on page 47 of HTMMIS. I guess it is an ascending base. Only 6 weeks long. Volume and skipping higher trumps the short base.
I think you can look at it as the immediate consolidation or as a longer term cup. Notice ULTA did the same thing.
-Hope this helps,
I think you have to toss out the 47% deep cup, and carefully assess the price and volume action of the run up from 20.63.
I think this is a long cup. Volume is low on the way down on the left side and picks up as it goes up the right. The weekly chart shows good accumulation with a number of above-average volume up-days on the right side, and a gap up through the 39.10 buy point on monster 1200%+ volume on the day of the breakout (3/8). I think the depth of the cup is the result of the severe correction in the general market. The index line is pretty ugly between Feb and Oct of that year. Somewhere in chapter 2 he talks about how cups can be very deep during market corrections and still be successful, so I would say that's the logic there.
I think it would be better to use a weekly chart and show us the base you are talking about.
Weekly looks like a cup with out handle, daily you could make the case for cup with handle. HTMMIS Page 47 list as "45 week large cup."
Right. HTMMIS says it is a 45 week large cup, but the trick is to determine how you distinguish L as the one that is going to go 10 times 8 quarters. Lots of stocks showed good earnings and accumulation in December through March of 1966/67. The right side of the base provides the answer. The pocket pivot weeks, the skipping higher on the daily chart and overwhelming volume on the breakout are big clues.
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