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Cupandhandlebreakout

Trading Patterns 101 - The Cup & Handle patternWhat is a Cup and Handle pattern? • The pattern resembles a cup with a handle, where the cup is in the shape of a "u" and the handle has a slight downward drift. • This drop, or “handle” is meant to signal a buying opportunity. When this part of the price formation is over, the stock may reverse the course and reach new highs. • It is a bullish continuation pattern i.e. it extends the existing uptrend Parts of a Cup and Handle pattern: The cup and handle chart has 3 main components: • Cup • Handle • Neckline/Resistance Important aspects: 1. Prior Trend: The cup and handle pattern is a bullish continuation pattern, hence the prior trend should be an uptrend. 2. Cup length: Generally, cups with longer and more "U" shaped bottoms provide a stronger signal. It should resemble a rounding bottom. This ensures that the cup is a consolidation pattern with valid support at the bottom of the “U”. The perfect pattern would have equal highs on both sides of the cup, but this is not always the case. Avoid cups with sharp "V" bottoms because there is almost no consolidation in that case. 3. Cup depth: Ideally, the cup should not be overly deep. In practice, the cup depth can be up to 60% of the last swing move. In my opinion, the best cups often have a depth of about 50% of the last swing. 4. Handle: Avoid handles that are overly deep also, as handles should not exceed 50% depth of the cup. The best cup and handle patterns have a shallow retracement on the handle (not more than 1/3 of the cup). However, in some situations, the price may retrace up to 0.618 Fibonacci level. 5. Breakout: Bullish confirmation comes when the pattern breaks above the neckline made using the prior highs with a good volume. 6. Volume: Volume should decrease as prices decline and remain lower than average in the base of the bowl; it should then increase when the stock begins to make its move higher, back up to test the previous high. 7. Target: The profit target is equal to the depth of the cup. It can be measured by the distance between the bottom of the cup and the neckline and extending that distance upward from the breakout level. 8. Stop-loss: Ideally, the stop loss is placed at the lowest point of the handle. But if the price oscillated up and down a number of times within the handle, the stop-loss can also be placed below the most recent swing low. Examples of the Cup & Handle pattern: Like always, if anyone is interested in getting a PDF version of this thread, then you can message me, I'll provide it. Happy learning. Cheers!
NSE:SAIL1!Education
by johntradingwick
18
Drink Tea From This CUP !!!Bajaj Auto , one of the auto giants has been forming cup and handle pattern for past 140+ days, if it gives breakout it can give a good up move after the retest. Note :- Wait for breakout to happen. Some quick fundamentals on this stock :- Return on Capital Employed (%) = 22.96 ( great ) Return on Networth / Equity (%) = 18.7 ( great ) Total Debt/Equity = 0 ( great ) Current Ratio = 2.51 ( great ) *This analysis was done by me only for educational purpose , feel free the share your views/feedback.*
NSE:BAJAJ_AUTOLong
by headymuk
1
BEL : Strong Breakout with Strong Q4 Results 🔥🔥🔥BHARAT ELECTRONICS (BEL) About Company : Bharat Electronics Ltd. engages in the manufacture and supply of strategic electronic products to defense services. Its products are weapon systems, radar and fire control systems, electro optics and communication, vacuum interrupters, electronic voting, telecom and SATCOM systems, semiconductor devices, microwave and transmitting tubes, solar products and systems. The company was founded on April 21, 1954 and is headquartered in Bangalore, India. Analysis : BEL has formed Cup & Handle kind of a chart pattern on Daily Chart and has given a strong breakout, hits over 3-year high. Strong Q4 Results: BEL reported a strong all-round performance in Q4FY21 despite a challenging environment. Robust order inflows at Rs 15,280 crore, up 15.8 per cent on YoY and order book at Rs 53,434 crore for the year provide good revenue visibility over the medium to long term. Also, strong balance sheet provides confidence about the continued accelerated business trajectory for the company Looking good at CMP for further upside movement :)
NSE:BELLong
by urmilaghelani
Titagarh Wagons - 1.5yr Cup and HandleThis seems to be a textbook example of a Cup & Handle breakout. Look at the volumes drying up during the cup formation. And again the volumes were very low during the handle formation. Massive volumes being seen near the breakout area. Not much selling is coming in. This can explode from here to 85 then 95 (the next resistance points). SL: Depending on your risk appetite: Below Weekly BO Candle / Below Daily BO Candle / 50% of Weekly BO candle / Below 20DMA TGT: After a 10-15%+ vertical move, breakdown of 20MA on Hourly chart (on a daily close basis) BUY GUIDANCE: Never ever buy before 3PM. I have been burnt many many times. Try to buy between 3:15 - 3:30PM, later the better. SELL GUIDANCE: Selling in Profit: Sell earlier in the session when the prices are higher, around 11AM. Selling at SL: Give your stock a chance to recover by end of session. If it doesn't recover, sell anywhere between 3:00 - 3:30PM. Note: I reserve the right to be wrong. DISCLAIMER: I am not a SEBI registered analyst. Please consult your financial advisor before investing.
NSE:TITAGARHLong
by raavigeorgian
4