Today we will discuss regarding one of the most successful pattern named Cup and Handle Pattern. The pattern is in the shape of a large cup followed by a small handle which is similar to U shape where the initial fall and recovery is very fast.
These patterns are successful when top of CUP is crossed with full force along with good volumes. Sometimes the neckline is retested but sometime smooth move is seen.
Lets look at one of the example:
ALPA LAB:
Here, we can see the stock first formed a CUP in almost 4 years, followed by a handle in next 7-8 months. It just gave a breakout in quick time span. So here if stock break 21 21.5 on lower side then it can be a failure otherwise stock is ready to catch up.
In Cup and Handle pattern we have two targets.
Target 1 is Size of Handle (10 rs in this case)
Target 2 is Size of Cup (14 rs in this case)
Risk reward entry here is good and any pullback to 22-23 can be traded.
Note: The above chart is presented for learning purpose only. This is not a trading or buy/sell tip. So your own research for stock.
These patterns are successful when top of CUP is crossed with full force along with good volumes. Sometimes the neckline is retested but sometime smooth move is seen.
Lets look at one of the example:
ALPA LAB:
Here, we can see the stock first formed a CUP in almost 4 years, followed by a handle in next 7-8 months. It just gave a breakout in quick time span. So here if stock break 21 21.5 on lower side then it can be a failure otherwise stock is ready to catch up.
In Cup and Handle pattern we have two targets.
Target 1 is Size of Handle (10 rs in this case)
Target 2 is Size of Cup (14 rs in this case)
Risk reward entry here is good and any pullback to 22-23 can be traded.
Note: The above chart is presented for learning purpose only. This is not a trading or buy/sell tip. So your own research for stock.
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