Skip to main content

The Cup & Handle Pattern

The Cup & Handle Pattern

The Cup & Handle is the corrective action after a powerful stock advance. Generally a stock will have a powerful move of some 2 to 4 months, then go through a market correction.

The stock will sell off into the correction in a downward fashion for maybe 20 to 35 percent off the old high point. The time factor is generally anywhere from 8 to 12 weeks depending on the overall market condition.

NEPSE Chart

As the stock comes up to test the old highs, the stock will incur selling pressure by the people who bought at or near the old high. This selling pressure will make the stock price drift in a sideways fashion with a bias to the downside for about 4 days to 3 weeks.

The handle is generally about 5% below the old high point. A handle that is any lower is generally a defective stock and contains higher risk for failure.

The time to buy the stock, is as it emerges into new highs at the top of the handle and not the old high point set some 8 to 12 weeks ago.

Comments

Popular posts from this blog

Reserved IPO for foreign employment

Reserved IPO for foreign employment; How we can apply IPO from Abroad TIA What is reserved IPO for FOREIGN EMPLOYMENT Recently The Securities Board of Nepal ( SEBON ) has issue notices that, any foreign worker who possesses a valid work permit is eligible to apply for an initial public offering (IPO) for the 10% reserve. This policy is only applicable to individuals who have been granted work permits by the Government of Nepal.  It does not apply to individuals who travel outside of Nepal. For visas to study and other purposes, except visas to work.  If Nepalese people living in golf countries send money home through the proper channels, they most possible benefits from this development. how we can apply reserved foreign employment IPO from Abroad? issued reserved IPO in the meroshare Well, if you are working in gulf countries probably most of us came here only after taking work permit by government of Nepal  श्रम, रोजगार तथा सामाजिक सुरक्षा मन्त्रालय . we ...

Bullish Engulfing Pattern and trade setup in binary options trading

  What Is a Bullish Engulfing Pattern? Bullish engulfing A bullish engulfing pattern is a green (Bullish) candlestick that closes higher than the previous day's opening after opening lower than the previous day's close. It can be identified when a small red (bearish) candlestick, showing a bearish trend, is followed the next day by a large green (Bullish) candlestick, showing a bullish trend, the body of which completely overlaps or engulfs the body of the previous day’s candlestick. How to make trade setup in binary options trading? Engulfing trade setup Once you spot the bullish engulfing draw horizontal line and wait until market price come to your drawn line area and close exactly at the label and if market open exactly previously closed area open your trade opposite direction for one candlestick time frame (1min, 5min). It will give you 90-95% accuracy.   Use same logic for the bearish engulfing pattern with opposite direction from bullish engulfing like below chart....

NEPSE Daily Summary with technical analysis chart

 NEPSE daily summary; Closed after loosing -0.25% NEPSE daily summary chart Day start with breakup +2.38 point at 1948.08, after ups and down market closed at 1933.88 after loosing -0.25%. Three sector indices closed green, "Investment" lost the highest by 0.91% while "Others" gained the highest by 0.57%. sub indices summary TOTAL TURNOVER AND TOTAL TRADED SHARES 238 scrips traded within 19,121 transactions. A total of 2,581,425 shares exchanged with the Rs. 96.52 Crores in turnover amount. This is lower than the last trading day's turnover of Rs. 1.670 Arba. market summary The Technical overview The index closed at the support trend lines with hammer candlestick. as we overlook at the chart its showing Symmetrical Triangle has been formed.  50 DMA support is nearest support for the on going trend.  Nepse index technical chart   *Financial instrument carries high level of risk, please study by yourself before taking any decision.