Earlier today, I notified premium members that I was watching NVE Corp (NVEC) for an entry. The stock has carved out a deep base over the last several months, but is moving again in the right side with volume following their last earnings report. The formation is what is often referred to as a cup with handle formation. It’s currently forming the handle with the formal pivot being .10 above the highest point of the handle which in this case is 37.77. I almost never buy a stock at the pivot point in cup with handle formations, but rather prefer to get in on the first big move out of consolidation from the handle formation. This is a much lower risk entry as fewer people are initiating positions here.
You can draw a short downward trend line (the line in purple in my chart below) across the high points of the handle to get an idea of where the stock needs to break from for an entry. It nearly indicated an entry today after getting a bit of a pop late in the day, but it stalled out in the last hour or so and didn’t quite clear that resistance. However, today’s move may be the beginning of a much larger move tomorrow and provide an entry. We shall see. Given the deep base, which is prone to failure, I’d be looking to exit my position near all time highs around 45.