The Inverted Cup-and-Handle (sometimes called Inverted Cup-and-Holder) pattern forms when prices rise then decline to create an upside-down “U”like shape (1, 2, 3, also known as the Cup), followed by a shorter relatively straight price increase that bounces from the right lip (from 3 to 4, creating the Handle). The rising handle forms as a result of mounting buying pressure created when the security retests a low at the right lip of the cup. Once the buyers give up, sellers take over and the security has the potential to decline rapidly. Continue reading...
Once the price breaks out from the top pattern boundary, day traders and swing traders should trade with an UP trend. Consider buying a security or a call option at the upward breakout price/entry point. To identify an exit, compute the target price for the Cup-and-Handle pattern by adding the pattern’s height (the difference between the highest high and the bottom of the cup) to the price at the right cup lip. The confirmation move is when the security moves past the breakout price above the right cup lip. Continue reading...
Pattern trading in the security market isn’t new. For years — decades even— traders have been scouring charts on a daily basis in search of pattern formations. The thinking has been that if you found a pattern early in its formation, maybe you could capitalize on a trade by predicting where the security was headed. The Cup-and-Handle pattern is a great example of how this works. Here is an image of the geometric pattern formation: Continue reading...
Discover the secrets of the Cup-and-Handle pattern in stock trading! Unveil how this powerful bullish indicator can transform your trading strategy, enhanced by Tickeron's Real Time Patterns (RTP) tool for smarter, data-driven investment decisions. Dive into a world where psychology, technology, and market trends converge to create profitable trading opportunities Continue reading...
Chart patterns are shapes that sometimes appear in the charts of securities prices. Some of them may prove useful to you. Some frequently discussed chart patterns include Head and Shoulders, Double/Triple Bottom/Top, Cups and Saucers, Flags and Pennants, and others. Generally, it can be useful to compare and connect the troughs to each other and the peaks to each other to see if there is a trend confirmation if the breadth is narrowing, or if a reversal might be imminent. Continue reading...
Unlock the secrets of the Inverted Cup-and-Handle pattern in trading! Delve into our insightful article that explores this bearish signal, offering strategic approaches and psychological insights. Learn how to leverage this pattern for informed trading decisions and risk management. Perfect for traders looking to understand market dynamics and capitalize on trends. Powered by Tickeron's advanced AI analysis. Continue reading...
Unlock the full potential of the classic Cup and Handle pattern! Discover innovative trading methods beyond the traditional rules. Explore multi-year cups, odd handles, and even intraday setups. Adapt to diverse market conditions and time frames for more profitable trades. Stay ahead with our expert insights. 📈 #TradingStrategies #CupAndHandle Continue reading...
Burn rate is a term for negative cash flow, or the rate at which a company burns through capital, especially a startup company. Burn rate is used frequently in the world of startups and venture capital. Using a burn rate, investors can see how much longer operations can be sustained with the capital at hand, and this length of time is called a runway. Startups will normally need at least a few months before they start generating enough revenue to have a positive cash flow. Burn rate is normally expressed as the monthly negative cash flow. Continue reading...
Mutual funds that invest heavily in companies that are small, but not micro-size, can be described as small cap funds. A small capitalization mutual fund primarily invests in small companies. Small companies are usually defined as companies with market capitalization of under $2 billion. The companies in this category are larger than those in the “micro” and “nano” cap categories. A mutual fund investing in small cap companies will generally experience higher price volatility than both mid cap and large cap mutual funds. Over time, small cap companies as a group have tended to outperform the broader market, so the higher risk is associated with higher return. Continue reading...
All-cap mutual funds invest in companies of all sizes. All-capitalization mutual funds invest in companies without a bias towards the capitalization of the company. In every mutual fund’s prospectus, the stated objective of the fund will be outlined, as well as the agreed-upon asset allocation guidelines. Deviation from these parameters can put fund managers in hot water with regulatory groups like the SEC. Continue reading...
Large Cap mutual funds primarily invest in companies with the highest market capitalizations. Large capitalization mutual funds, also called “large cap funds,” invest primarily in large companies with market capitalization of over $10 billion. Some examples include Microsoft, General Electric, Google, and other well-known companies. Some large cap mutual funds invest in all of the companies in an index (therefore closely following the performance of that index), and some pick and choose which large companies to select in an attempt to outperform the index. For more information about indices, see “What is Index Investing?” Continue reading...
Mid-cap mutual funds invest in medium-size companies. A middle capitalization mutual fund invests mostly in medium-size companies. While the definition of “medium-size company” varies, most professionals define it as a company with a market capitalization from $2 billion to $10 billion. Companies you may have heard of within this size range are Eaton Vance, Guess, and others. In general, mid cap companies are more volatile than large cap companies, and the choice of the right fund managers becomes more important. Continue reading...
A Channel Up pattern shows a clearly defined uptrend and describes the behavior of the price contained between upward sloping parallel lines. Higher highs and higher lows characterize this price pattern. This pattern is created via a lower trendline connecting the swing lows (1, 3, 5), and an upper channel line that joins the swing highs (2, 4, 6). A breakout above a Channel Up’s resistance line points to a continuation of the growth momentum, while a breakdown below the pattern’s support line can demonstrate a possible trend change. Continue reading...
Enterprise Value is the total cost to acquire a company. The Enterprise Value of a company is the amount that would have to be paid for full ownership of it, which would include market capitalization (price per share x shares outstanding) + net debt (all liabilities - cash and equivalents). Market cap alone is technically just shareholders equity, and not capital from debt, so Enterprise Value adds that in for consideration. Enterprise value is the numerator in EV/E (Enterprise Value over EBITDA), a very common valuation ratio. Continue reading...
Bottom-up investing is the practice of looking for solid companies and investing in them as opposed to investing in indexes and basing that decision on broader market/macro conditions. In bottom-up investing, an investor or advisor takes the stance that the best investment portfolio will not be a broad allocation across market indices, but that an optimal portfolio should be built from the bottom-up with the stocks and bonds of individual companies whose fundamentals and individual potential have been analyzed. Continue reading...
Fluctuations are represented in terms of volatility, and different types of investments experience different levels of volatility. The answer here depends on which market you’re talking about. Generally speaking, the capital markets in fixed instruments, such as government bonds, are the least volatile. Market fluctuations of the price of commodities, small-cap stocks, and emerging markets are the largest, and can be as high as 30-40% per year. Continue reading...
A covered call is when the writer or seller of a call option either owns the underlying security, or has a guaranteed way to obtain it. Investors are able to open a position for another investor to take. An example of this would be selling a call option. The seller, or “writer,” of the contract is obligated to fulfill the contractual obligation outlined in the call, namely to deliver 100 shares of the underlying stock to the owner of the call option in exchange for the strike price listed in the call contract. Continue reading...
One way of classifying mutual funds is by the market capitalizations of the companies they invest in. Mutual funds can invest in stocks and bonds of foreign corporations, or corporations in the biotechnology industry, or with any other objective they may have. But one way to manage it is by size—to capture market exposure for companies of different sizes. The size of a company is defined by the amount of market capitalization it has, which is the number of shares outstanding multiplied by the share price. Some indexes and funds will adjust market cap rankings to give weight to “free float,” which is the amount of market capitalization that is freely trading, and is not held by other companies, governments, or founding families. Continue reading...
Market Capitalization refers to the total ‘market-size’ of a company, calculated by the number of shares outstanding multiplied by the stock price. Investors should take care not to consider a company’s market capitalization as an accurate reflection of the company’s actual size by assets. Companies with very large market capitalizations can still operate with net losses, Twitter being an example. Continue reading...
The Russell 2000 index is comprised of the 2,000 smallest companies in the U.S. If you’re looking for a small cap domestic benchmark, this is a good one. Companies included in this index are reevaluated annually to make sure they can still be considered small cap companies. Since the Russell 1000 index represents 90% of the market, the Russell 2000 index represents about 10% of the market (if you are wondering whether or not there is a Russell 3000 index, the answer is yes — it is a combination of the Russell 1000 and Russell 2000 indices). Continue reading...