General information regarding cup n handle pattern. LT used as an example only. This chart pattern was first popularized by William J. O’Neil. The cup part of the formation is created when profit taking sets in or the market itself is in a correction and the stock sells off and forms the left side of the cup to the downside. The cup bottom is formed when the stock finally runs out of sellers at new low prices and buyers start moving in and bidding the stock back up again as sellers demand higher prices to sell the stock.
The pattern has better odds if it is a stock in a strong sector that has increasing earnings growth expectations. LT is strong stock ...clean company .