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Cup And Handle

understanding cup&handle pattern : types of pattern 1cup and handle pattern- The Cup with Handle is a bullish continuation chart pattern that marks a consolidation period followed by a breakout.It was developed by William O'Neil and introduced in his 1988 book, How to Make Money in Stocks. cup with handle is a chart pattern that has a well defined horizontal boundaries breakouts from chart pattern with horizontal boundaries are usually strong and reliable. As its name implies, there are two parts to the pattern: the cup and the handle. The cup forms after an advance and looks like a bowl or rounding bottom. As the cup is completed, a trading range develops on the right hand side and the handle is formed. A subsequent breakout from the handle's trading range signals a continuation of the prior advance. edwards and magee in their technical analysis book said that a stock should breakout by 3% margin from the resistance level for a proper breakout. please note that this is a trading tactic edwards and magee discussed in their book. each trader or investor can implement their own trading tactic to enter size take profit and exit from different chart pattern breakout opportunity , its not any rule. stocks which completed target as per cup and handle pattern- 1. ceat 2. dcb 3. federal bank and many more.. will be covering more on probable breakouts and those are moving towards their targets.
NSE:DCMSHRIRAMEducation
by kacharts
10
Educational 15: Cup & Handle (Continuation Pattern)The Cup & Handle pattern is one the most common and favorite patterns among the traders. It is another time-tested pattern that has created valuable gains for traders and investors. It is known as a bullish continuation pattern and resembles the shape of a tea cup on a chart. Plot: First, it's important that there is an upward trend before the formation of the cup and handle. In general, the larger the prior trend is, the lower the potential for a large breakout after the pattern has been completed. Reason of the Shape: The reason is that a cup-and-handle pattern is a signal of consolidation within a trend, where the weaker investors leave the market and new buyers and prior holders stay in the market. If the shape of the cup is too sharp or V-Shape (or quick), it is not considered a true consolidation phase in the upward trend and thus weakens the potential trade signal. Cup: A cup formation happens when the price moving in an uptrend shows a pullback followed by a consolidation period which makes the bottom of the cup and finally the reverse back to upside continuing the uptrend. Bottom of a cup serves as support for the pattern as shown in above chart. Usually the pattern looks like a 'U' to round bottom. The cup should be considered reliable only when it is less than half percentage of the preceding trend. The deeper the 'U' or round shape the reliable the pattern is. Handle: The handle is the downward move after the upward move on the right side of the cup. During this downward move, a descending trendline can be drawn, which forms the signal for the breakout. A move above this descending trendline is a signal that the prior upward trend is set to begin. Major Breakouts: 1. Descending/Downward Trend line or Resistance of the Handle 2. The price point of the two peaks in the cup Thank you for your continuous support and appreciation, Regards, Neetesh Jain
NSE:CNXITEducation
by NeeteshJain
14