In the article of the month of April, we learned about the Head and Shoulder pattern. This month, I have come up with the Cup and Handle pattern. It is also very famous chart pattern. It is a continuation pattern. In this pattern, there is a consolidation period in the form of a rounding bottom after a trending move higher in the price. This rounding bottom is known as the cup. It is followed by another consolidation period which has a depth less than half of the depth of the cup. It is known as the handle. This is why the pattern is known as the cup and handle formation. This pattern is very easy to visualize. I have included a few charts where this pattern had emerged.
1. ABOUT THE CUP AND HANDLE PATTERN
A few facts about the cup and handle pattern:
It is considered as the bullish continuation pattern. It has 4 necessary ingredients.
1. The prevailing uptrend
2. The cup
3. The handle
4. And the neckline