The weekly time frame is your bigger-picture chart. When scouting chart patterns, this should be your time frame of choice. It's easier to see past formations as well as those in development. Use the weekly chart to gauge the soundness of the pattern. Bases should be fairly tight rather than wide and loose. With the weekly chart, you can more easily see if a stock meets the minimum time requirement for a particular base. Remember, most patterns need at least seven weeks to form.
After a stock clears a proper buy point, look at its volume. It should be at least 50% above its average on a breakout.
Switch between weekly and daily charts to see long term and short term patterns. Oil and gas producer Continental Resources (CLR) went public in May 2007 at 15 a share. On July 17, the stock hit a high of 18.39 1 then started to form its first base.
By late September the stock was shaping a cup base, giving a buy point of 18.49, or 10 cents above the July high as seen on a weekly chart.
But switch to a daily view and you'll find a six-day handle 2 with a lower buy point at 18.30.
Continental cleared the handle Sept. 27 in more than twice its average volume 3. By early January 2008, it had surged more than 50%.
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