ARCO - Coming off cup & handle pattern

I am starting to like trading stocks which are making new high or those that are pulling back to the 50 day MA after a sustained uptrend. All the brand names, although offering a deep discount, have huge resistance overhead. I made a huge adjustment to my trading style by buying into ARCO and DTLK, two relatively unknown companies to me. In spite of the Dow dropping huge on Friday night, ARCO was actually giving me huge profits instead.

Now that I have experience the benefits of looking for new companies that are making new 52 highs, I realised that I actually enjoy the process of hunting down these charts and looking for the correct buy point. I will be posting more of these companies here soon. Stay tune.

Potential Monsters Stocks - AUTH, SPRD and NUS

Dear Readers, I am currently contemplating if I should be placing my long bets on these 3 potential monsters stocks. These companies are coming off nice bases and have come up with new innovations or products in their respective sectors.Top of my buy list is AUTH, followed by SPRD and then NUS.

Authen Tec, Inc. (AUTH) - Company is a provider of security, identity management and touch control technologies for PC, wireless devices and information technologies market. It recently announced that it is creating new mobile payment solutions in a collaboration with another company. Stock is coming off a 5 month cup and handle pattern.

Spreadtrum Communications, Inc. (SPRD) - The company announced that it was recently selected by Samsung as a TD-SCDMA baseband chip supplier. Not that I know what a baseband chip means but one thing i know is that the SPRD is earning money and the technicals is looking very good. Stock is coming off a 5 month cup and handle pattern.

Nu Skin Enterprises, Inc. (NUS) - To my limited knowledge, this company do not really have any new products or innovation to showcase but apprently it is pulling in the big money from its new markieting strategy. Its technicals is good and is coming off a 5 month flat base.

Have a great weekend !

Initiated 2 trades - DTLK & ARCO

I bought into DTLK yesterday and ARCO at the start of today's trading. These two stocks are currently in a uptrend. Datalink Corp (DTLK) is an IT computer providing information storage for mid and large sized companies. While it is not a new company, it is pulling in big bucks as earning has surprised on the upside thus far. I initiated a swing trade on DTLK when the stock pulled back to the 50 day MA at about $8.77.

DTLK

 
Arcos Dorados Holdings Inc (ARCO) is the world's leading franchiser of McDonald's restaurant with a huge base in South America. Its stock recently IPO-ed in mid April at $21. The technicals of the stock is pretty good with  a classic cup and handle pattern. I initiated a position this morning at $27.05 on a successful retest of its breakout point.


ARCO

If my positions are not stop out, my holding period will be for months. Remember to trade with stop loss. I will be pyramiding up at proper buy point too.

Cup and Handle Pattern - Financials !!!

In the book "How to make money in stocks" by IBD's founder William O'Nell, he wrote on the cup and handle formation on stocks which is a bullish continuation pattern. Cup patterns can last from 7 weeks to as long as 65 weeks, but most of them last for three to six months.

 Cup and handle formation on weekly charts are very powerful as weekly charts are mostly used by institutions who seldom move in and out of their stocks holdings due to the massive amount of their portfolio. Institutional players are mostly position traders who gets in before the crowd at the accumulation phase.

Let's take a look for a stock (Aloca - AA) which has already completed the cup and handle pattern. See the cup and handle pattern?

Now let's take a look at the Direxion Financial Bull 3X ETF. Note the similiarities except that the stock has yet to break out. It is currently bouncing off the support on top of the Ichimoko Clouds.I am looking to load up FAS on coming Monday with stop loss, of cos.