Mark Minervini’s Favorite Chart Setup The “Cheat” | IBD Live

TL;DR

This video discusses a chart setup known as the cup completion cheat, which is a variation of the cup and handle pattern. It also emphasizes the importance of volatility contraction patterns in trading.

Transcript

[Applause] well my favorite chart setup is basically a cousin of a couple handle it's what i call the cup completion cheat and then of course there would be the load sheet and that's just sort of a coupled handle but the handle is in the lower either lower one-third of the middle one-third where the coupled handle would be in the upper one-third th... Read More

Key Insights

• 💘 The cup completion cheat is a unique chart setup that often signals the completion of a cup pattern.
• 💘 Volatility contraction patterns, including the cup completion cheat, can be powerful indicators of potential price movements.
• 😃 Big IPOs can present attractive trading opportunities, especially when they experience a correction and show signs of volatility contraction.
• 🍵 The absence of a handle in a cup completion cheat does not necessarily invalidate the pattern's potential for a successful trade.
• 🥳 The concept of ants, or stocks that go up 12 out of 15 days with increased volume, is another valuable indicator of institutional accumulation.
• 💘 The cup completion cheat and volatility contraction patterns are consistent elements in the speaker's trading strategies.
• 💘 The speaker emphasizes the importance of combining multiple characteristics, such as volatility contraction and the cup completion cheat, for successful trades.

Questions & Answers

Q: What is the cup completion cheat and how does it differ from a cup and handle pattern?

The cup completion cheat is a variation of the cup and handle pattern, where a lower pivot occurs within the base before the handle forms. It is called a cheat because it often leads to the completion of the cup. In contrast, the handle in a cup and handle pattern is typically in the upper one-third of the middle one-third of the base.

Q: Can you provide an example of a stock that emerged from a cup completion cheat?

Google is an example of a stock that came out of a load cheat. It did not have a handle, but it exhibited the characteristics of a volatility contraction pattern. This means that it experienced a period of low volatility before making a significant move.

Q: How do you identify potential entry points for big IPOs?

When trading big IPOs, one strategy is to look for a correction after the stock runs up. The load cheat, which is a lower pivot within the base, can be a favorable entry point for these stocks. This pattern often precedes a rally without the formation of a handle.

Q: What is the importance of volatility contraction patterns in trading?

Volatility contraction patterns, such as the cup with handle and cup completion cheat, are significant because they indicate periods of low volatility before a potential breakout or significant move. Monitoring volatility can help traders identify favorable entry and exit points.

Summary & Key Takeaways

• The cup completion cheat is a chart pattern that occurs when a lower pivot takes place within the base before the handle forms in a cup and handle pattern.

• The cup completion cheat can be a potential entry point for trading big IPOs, particularly when they experience a correction.

• Volatility contraction patterns, such as the cup with handle and cup completion cheat, are characteristics found in successful trades.