Eyeing a (Carbo) Ceramic Cup

• Posted by Greg Harmon
• on February 26th, 2014

Carbo Ceramics, $CRR, had a long run higher from July into the beginning of November before consolidating at 125…. for a month. Suddenly the high flyer was dead money and worse fell back in December and January. but it is right back at that 125 resistance level, stalling when it hit the extension of what was rising trend support, and is not resistance. The price action has traced out a Cup pattern since mid December and the current consolidation is building a Handle. These patterns look for a move higher equal to the depth of the Cup, or $21.50 in this case, on a trigger above the previous resistance. That targets 146.50. There is support for more upside from the Relative Strength Index (RSI) that is bullish and the MACD that is rising. A break up soon with out any pullback can give good risk reward against a stop under the handle, about 121.70. But wait for the trigger, as a Handle can move lower, even down to the 115 area, without negating the pattern.

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