“What’s this pain in my chest?
“Is this a HEART ATTACK?”
So, for the next two years, I was in and out of the hospital.
Most of the times, they were false alarms.
After many examinations, a heart specialist diagnosed me with costochondritis.
It’s a chest wall pain due to inflammation of the rib cartilages. But it felt like a heart attack.
Doctors advised me to have plenty of rest for the next several months.
My active lifestyle comes to a halt. Most of the days, I felt broken.
I can’t do anything except rest. Any slight movement resulted in more chest pain.
But my family especially my mom gave constant encouragement. She didn’t give up on me.
Instead, she instilled faith and patience in me. Especially during such trying times.
Although the road to recovery was long and arduous at times, I managed to get better. The pain got lesser with time.
In less than two years, the pain was no longer there. I can even do intensive exercises like push-up without worry.
All credits go to my family as well as my strict regimen that includes stretching exercises.
The chart pattern that I’m about to share is akin to my life experience above.
The formation of the pattern requires lots of faith and patience too.
Above all, it’ll test your discipline in stock investments.
The name of this chart pattern is unique.
It’s called the ‘saucer.'
WHAT IS THAT?
Saucer formation is akin to cup pattern. But it’s shallower in depth and takes a longer time to develop.
It’s usually more stretched out and flatter than a typical cup-type base. As the name suggests, it resembles the silhouette of shallow dishes or saucers.
It's true that it may take weeks or months (or sometimes years) to form. Then again, the saucer tends to produce big stock market winners.
Other chart patterns shake investors with fast and sharp corrections. But, saucers have the distinction of wearing investors out.
So, if you see a potential saucer forming, patience can be a virtue.
HOW DOES IT WORK?
After a prior uptrend, a stock will drift lower at a slower rate. It’ll then move sideways before finally forming the right side of the base.
Saucer bases tend to correct no more than 12% to 20% in bull markets. But the depth can be as much as 30% or more in market corrections.
From my observation, big-cap stocks are more likely to form saucers. These giant stocks are usually the steady grower's type.
To spot the saucer, you must look at the chart action over a longer period like a weekly chart.
If you look only at daily charts, you might never see the saucer.
The saucer base has unique characteristics.
A long saucer takes a much longer time to shake out weak holders.
Stocks with saucer pattern look like they're tracking sideways. Often, the companies are restructuring or executing strategies leading toward a turnaround.
The sideways action can lead investors to drop the stock from their radars.
Buy points for saucer bases work the same way as on cups. You can enter at the same price level as the old price high on the base's left-side high.
Another entry is via the handle.
When the stock climbs the right side of a cup, approaching its high, the last of the weak holders sell. They fear another sharp downtrend. The weak holders' selling sketches the handle.
You’ll buy when the stock break above the old high point of the handle.
Ross Stores is a discount clothing and home goods retailer.
It began to form the saucer base in mid-June 2010, as it slid toward its 10-week line.
Ross established a bottom for this saucer in August 2010. Then it continued to build the base's right side. The pattern featured a correction of 16%.
In mid-to-late October, the stock edged past around 13.50 buy point and charged out of that saucer.
Note that this great stock run can only happen when the general market is in an uptrend.
Ross rose 144%, building new bases along the way, until it peaked in August 2012.
As an investor, you will need a skill called patience.
To an impatient investor, the saucer might look more like a dull stock than an excellent opportunity.
You don't want your emotions to shape your investing.
Also, don't allow them to dictate your investment strategies too. If you do, you're shrinking your opportunities right from the start.
It's better to be flexible. When circumstances call for patience, resist the impulse to act. When the situation demands quick recognition and immediate action, then work immediately.
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Also, tell me in the comment section:
When is the last time that you were struggling to hold on to a lifeless stock but emerged successful in the end?