EQT Corporation Based on Cup and Handle Pattern

18 hours ago

1. Pattern Analysis
- Pattern: Cup and Handle Pattern
- Timeframe: 11 Years
- Description: EQT Corporation has formed a long-term Cup and Handle pattern on the weekly chart. The "cup" is characterized by a rounded bottom spanning several years, reflecting a gradual recovery from a significant downtrend. The "handle" represents a consolidation phase near the resistance level at $48, where price volatility decreases as buyers and sellers contest this critical level.

2. Volume Analysis
- Cup Formation:
- During the cup's decline and recovery, volume declined significantly, confirming reduced selling pressure as the price bottomed.
- Volume steadily increased as the stock recovered, indicating rising buying interest.

- Handle Formation:
- The handle formation has shown lower volume, which is a healthy sign of consolidation. A breakout above $48 with a spike in volume would validate this pattern.

3. Price Action Analysis
- Key Resistance: $48
- This level marks the rim of the cup and serves as the critical breakout point. A sustained move above $48 with strong volume would signal the start of the next bullish leg.

- Support Levels:
- $36: The bottom of the handle, providing immediate support during consolidation.
- $24: The midpoint of the rounded bottom, serving as a long-term support zone.

- Candlestick Patterns:
- Recent bullish candles show strong momentum, with higher highs and lows approaching the $48 resistance, indicating increased buying activity.

4. Validation of Bullish Signal
- A breakout above $48 with significant volume will confirm the Cup and Handle pattern, indicating a continuation of the uptrend. The long-term timeframe and alignment with historical resistance strengthen the pattern's reliability.

5. Target Setting
- Target Projection:
- The height of the cup from the bottom to the resistance level is $48 - $12 = $36.
- Adding the height to the breakout point gives a projected target of $48 + $36 = $84.

- Incremental Targets:
- Target 1: $60 (+25%) – A near-term level to watch post-breakout.
- Target 2: $72 (+50%) – A medium-term target.
- Target 3: $84 (+75%) – Long-term projection based on the full cup height.

6. Entry and Stop Loss
- Entry Strategy:
- Primary Entry: Above $48 after breakout confirmation with high volume.
- Alternative Entry: On pullbacks to $36-$40 if the price retraces during consolidation.

- Stop Loss:
- Place a stop loss below $36, as a breakdown of this level would invalidate the handle formation.

7. Trade Setup Summary
- Entry Levels:
- Above $48 on breakout confirmation.
- Near $36-$40 on pullback support.
- Targets:
- Target 1: $60 (+25%).
- Target 2: $72 (+50%).
- Target 3: $84 (+75%).
- Stop Loss: $36.

8. Final Notes
The Cup and Handle pattern on the weekly chart is a strong bullish setup, supported by an 11-year timeframe. A breakout above $48 with significant volume would confirm the pattern, signaling a high-probability move toward the projected targets.

Traders should monitor volume during the breakout attempt, as increased activity will confirm buying strength. The alignment of historical resistance and the pattern's structure provides a favorable risk/reward ratio for medium- to long-term gains.