Cup with Handle Chart Pattern Video Lecture | Chart Pattern Trading: Learn the Fundamentals - Business Basics

good afternoon everyone this is
Christian with perfect stock alert calm
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please refer a friend or I'll hit you in
the face with a brick what I can't I
can't say that today we'll be looking at
the cup with handle of chart formation
and this is a bullish continuation
formation to be a continuation formation
you must have a previous up training
this is a bullish formation so ya have a
previous uptrend typically for a few
months if it's too long of an uptrend
this forms I can come into question as
to whether or not it's actually going to
be effective and if it is you know
pretty late in an uptrend it also
decreases upside potential when this
formation happen so typically you want
to see it pretty early on in a or in an
uptrend
the cup with handle is much like the
rounded bottom it's basically starts
with a rounded bottom you have a
sell-off which is just consolidation
period you can have good volume on the
sell-off that you have here that's
normal just like it is with the rounded
bottom at the very bottom of the cup for
me you could have an increase of volume
as well it shows that kind of butting
heads from sellers and buyers right
there and just buying going on and
typically volume will either decrease or
start to increase on the buy side as you
start to go up on the right side of the
cup or the rounded bottom here if you
continue to move on up what you're going
to see are two high points approved a
initial high point would a sell off
began and you're in a perfect scenario
going to find the rounded bottom Peaks
equally with the previous it doesn't
have to be that way in some cases it'll
be a little bit less some case a little
bit more the next phase of the chart
formation is the handle this basically
happens when a price activity starts to
consolidate and pull back down this is
normal because of the depth of the cup
the price activity has fallen in this
particular case down to 16 dollars a
share and then rallied all the way back
up over a couple of months all the
2:24 it needs to take a breather so
that's why you get this move down here a
lot of times you'll see that you get the
resistance level right here and you can
in this case we've got a breakout with
price closed above that and it could
have fooled a lot of people thinking
well you know resistance now has got to
be support because it's broken through
it and then she turns right around and
pulls back down here and consolidates oh
I'm gonna throw you that's normal in a
perfect scenario this will last around 1
to 4 weeks it can't last longer but
typically it's about 1 to 4 weeks and
then you'll see it start to climb back
to the outside that's when you're going
to see the real breakout and that one's
gonna have to be on good ball um-- you
want to see volume supporting that
breakout the breakout can be McLean this
chart up you notice there's a couple
breakout points here you've got the
previous resistance line right here
alright or you could use a trend line on
this particular chart you had the
ability to draw a trend line right here
and you could have seen the breakout
happening right in front of you and it's
again supported by strong volume which
gives us more confidence in the move
typically stock traders have been
looking to be buying right here and you
get a breakout of resistance on a good
volume they've had a time to consolidate
this is a really strong move to the
upside a lot of guys will measure the
distance from the right side of the cup
the highest peak and down to the bottom
of the rounded bottom the other cup take
that distance and then add that to the
breakout point and they get a target for
how high they expect a price to go
remember this is only a target it's not
an exact science so just use your best
judgement keep doing analysis as the
trend develops
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