Cup And Handle Chart Pattern
Cup And Handle Chart Pattern. Cup and Handle: A cup and handle pattern on bar charts resembles its namesake, a cup with a handle. Secondly, you need to learn to identify the length and depth of a true cup and handle, as there can be false signals.
After forming the cup, price pulls back to about ⅓ of the cups advance, forming the handle. The cup is shaped as a "U" and the handle has a slight downward drift. The cup and handle are the chart patterns that occur on the graphs or charts to indicate the market situation.
The cup with handle is a popular trading tool used by investors in almost all financial markets.
The handle can be a sideways or declining price channel that occurs near the "lip" of the cup.
Such a pattern shows that a stock got rid of weak hands and that big operators accumulated size. The cup and handle is a bullish continuation pattern that marks a consolidation period followed by a breakout. Chart patterns form when the price of an asset moves in a way that resembles a common shape, like a rectangle, flag, pennant, head and shoulders, or, like in this example, a cup and handle.
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Janice Pierce
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