CHART PATTERN - CUP AND HANDLE PATTERN

As in the previous post we have discussed the Flag Pattern in this we are going to discuss the CUP AND HANDLE pattern in the same simple way. 

It’s identification is simple, as the name says a Cup like structure and its handle in the right side of cup as shown in the image below.

The pattern can be traded in 2 ways - 

• At the time of breakout 
• At the retest of the pattern

Best Performance - 

• There should be a pre 30% increase in the price level before the pattern is formed. 
• Atleast 5% increase from the breakout level is recommended before any retest. 
• Volume should be in decreasing mode as the Cup is formed and a spurt near the breakout level is a good sign. 
• The shorter the handle more reliable is the pattern, long handles are specifically to be avoided as they don’t give good results.  
• Duration is usually long from 6 to 65 weeks pattern. 

One more important tip - 

• Higher left side of the CUP adds more reliability in the pattern (as shown in the image below). 

IF YOU HAVE ANY QUERIES REGARDING THE PATTERN CAN COMMENT.

Happy Investing

 Disclaimer - Every pattern has a chance to not perform as required as financial market works more on human pyschological nature rather than some mathematical calculation. So always be ready to adjust a little accordingly.