Saucers

dave50

Newbie
2 0
Could someone post some information on saucer bottoms, and measuring techniques.

I have a basic understanding, but can't find any indepth information.

The chart I have been looking at is RON over a 2 year peroid (candlesticks), any help or observations welcome.

Dave
 

ChartMan

Legendary member
5,580 46
Don't know about a suacer bottom....but there are plenty of examples of cup and handle bottoms, which start life as a saucer.....From what I see, this is developing into a C&H. there should be a period of low volume, producing another mini saucer, finally breaking out at 1.28p. On the downside, my feeling is , that as a low volume stock, TA tends not to work/perform too well. If all goes to plan, you should get the breakout on volume and I guess there will be plenty of time to catch the train...
The target price is breakout ( 1.28 ) + 1.28 - bottom = .391 so I make that 2.169p
 

Riz

Experienced member
1,266 5
Saucers are also called rounding bottoms (reversal) which are long term consolidations turning from bearish to bullish, best results are on longer term charts...as for measurement I think its from the lowest point which is supposed to be at the centre of the bottom to the line between the left and right side, in that respect it is similar to H&S measurement...

Riz
 

Bill G

Member
92 2
The Saucer is closely related to the line formation, but has its own characteristics and may form much more quickly. Prices forming a saucer gradually curve upward (in the case of a bottom formation) or downward (in the case of a top).The cu rve, of course, tips off the probable direction of the major move to come,. There's another picturesque feature.A great majority of saucers (not quite all) develop a handle or platform, consisting of either a horizontal or slanted line, before the main move gets underway. Perhaps the formation should be called a sauce pan, instead.



How it happens
As with all valid chart patterns, these stem from a typical market psychology in certain situations. For example, the line bottom, or "long base," occurs when the supply of and demand for a stock are in a very stable balance. And there is little trading in the stock, because there has been no change in its outlook, for better or worse, and no news to draw attention to it. Stockholders see little reason to at the current price level, and potential buyers see little reason to buy, especially if they must bid the price up to smoke out any sellers. A break out from this long base on increased volume probably means that something is brewing, a new product, a jump in sales or profits, a merger and this rumour or fact has produced an unusual demand for the the stock. Incidentally such breakouts are rarely accompanied by company announcements, those come later. Frequently, "insiders" have been quietly adding to their holdings during the "long base" period.At any rate, someone in the know is buying, and sooner or later, the facts become known to more and more people, and the price begins to take off.

Volume
A tidy characteristics of the line and saucers formations is that the volume portion of the chart tends to follow the price. Throughout a line, or base formation, volume is exceptionally low until the break out into new high ground. Even then, trading may be relatively light at the outset, but it soon expands dramatically.

In a typical Saucer, on the other hand, trading slowly diminishes to a low then gradually picks up as prices curve to complete the pattern or move to the platform stage. Volume thus has formed a Saucer itself. It may become quite active at the start of the platform and again at the end, as the stock breaks out of the platform area.
I did have images in the file, I`ll have to find out about that.
 

dave50

Newbie
2 0
Thanks guys for your time and effort, you have been a big help.

Cheers

Dave :)
 

ChartMan

Legendary member
5,580 46
So go and buy £50k's worth in our competition......could be your claim to fame, and it doesn't cost you a penny and you risk nothing but your pride:) There's still 2 weeks to go I think....
 

easymon1

Newbie
2 0
aka Saucer and Spike

dave50 said:
Could someone post some information on saucer bottoms, and measuring techniques.

I have a basic understanding, but can't find any indepth information.

The chart I have been looking at is RON over a 2 year peroid (candlesticks), any help or observations welcome.

Dave
These can be fun. Here's a good example, STEM starting Aug. 23,2004. Now the question's "How high the moon?"
Does anyone here know a good systematic approach to finding these opportunities in the making?
Cheers!
 

JumpOff

1
702 14
I'm beginning to have an alternative theory about how to use these things. I'm looking at how they behave around trendlines. It will be interesting to see if most of them look kind of like this. - where the tops of the saucer are bumping into resistance, and the right side of the saucer and handle run into trendline support..... Since not every cup and handle turns into a bull run, (Or perhaps we only call them that when they do?), perhaps it's easier just to watch the price action against the trendline and not worry about "is it a cup and handle?" "is the handle long enough?" "How long should the handle retrace?"

If the handle breaks down through the trendline, we short, if not, we go long...and just follow the price action....

Also, this image isn't the best illustration - the time frame is too short to be considered a classic cup and handle, but I've used it just to illlustrate my thoughts. This is a daily chart and the blue trend line goes back 5-6 days...
JO
 

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FTSE Beater

Experienced member
1,518 4
Hi JumpOff

You have to have a look at what a Cup and Handle pattern is showing.
The cup is formed by a normal reversal in the market. The handle is then formed by the price attempting to test the low of the cup. It fails to reach that point, which in turn is a bullish trading signal. From there any break of resistance, formed by the top of the cup, will be met with further buying pressure and therefore the price rises and into a bull run.

HTH :)
 
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