Bullish Cup and Handle Pattern

Version 2.0: Publish Date 20/11/2012

bullish cup and handle

Type: bullish continuation

A cup and handle is a popular chart pattern among technicians. It had developed by William O’Neil and introduced in 1998. As the name suggests, the pattern is shaped like a cup with a handle. The shape of the cup is “U”, and the handle is pointing downward. The cup has a “U” shape and a downward-pointing handle. The ending point of the handle indicates buying opportunity. As soon as this part of the price formation is complete, the stock may reverse course and reach higher levels.

1. Prior trend: We are trading bullish continuation Cup & handle. So, the prior trend should be upward. It shows that the price will continue to trend after a retracement of the previous impulse. Buyers are generating demand to push the trend.

2. Construction: “U” shaped bottoms are an ideal pattern and more reliable than “V” bottoms because there is almost no consolidation in this case. The perfect pattern would have equal highs on both sides of the cup, but this does not often occur.

3. Duration: It is possible to spread the cup out over 1 to 6 months, and occasionally longer. The handle should form and finish over a period of 1-4 weeks.

4. Breakout: The pattern confirms a bullish trend when it breaks above the neckline formed by the previous highs with good volume. A buy point is reached when the stock breaks out or moves upward through the old resistance level (right side of the cup).

5. Volume: During the base of the bowl, the volume should decrease as prices decline, remaining lower than average; then, it should increase when the stock begins to move higher, back up to the previous high.

7. Profit targets: It is calculated based on the depth of the cup as a profit target. The breakout level can be determined by extending the distance from the bottom of the cup to the neckline and measuring upward from there.

8. Stop-loss: It is ideal to place the stop-loss at the bottom of the handle. Also, You can place the stop-loss below the swing low if the price oscillated within the handle several times.

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3-Tricks : Where to start Elliott Wave counting on the chart?

Publish Date: 26/08/2021

how to wave count in elliott waves?

We get a lot of questions about Elliott Wave, but a set of questions often received from the followers:

  • Where to start wave counting on the chart?
  • How do I begin/start wave counting on the chart?
  • How do you do Wave Counting?

As a part of establishing Elliott Wave Counting on a chart, we use three working tricks. These are my steps/processes or tricks that can help you to start counting waves.Continue reading

Part 1: Which Strike Prices Are The Most Money-Making?

moneymunch options strike priceFigure 1.1

There is tremendous importance in options trading when it comes to strike prices. Traders can reduce the pain of option decay by choosing the right strike price.

In terms of money, there are three kinds of strike prices.
1) ATM – At the Money
2) OTM – Out of the Money
3) ITM – In the MoneyContinue reading

Part 1: How to Count Waves Using Chart Patterns?

We can count waves using traditional patterns like Head and shoulders , Double Top and Bottom,
Triangle, cup & handle, etc. This article is about how you can count waves by identifying chart patterns.

I have covered Three chart patterns in this article,
1) Triangles
2) Head and shoulders
3) Double Top and Bottom

1) Head and shoulders :Free stockmarket elliottwave chart one

In addition, the two lows formed when the price failed to rise and fell back down were basically at the same level. The horizontal line is often referred to as the “neckline” When the price fails to fall back for the third time the neckline will break. So “head and shoulders” was officially established.

Changes in volume with head and shoulders:
During the formation of “head and shoulders”, the left shoulder has the largest volume , the Head has a slightly smaller volume , and the right shoulder has the smallest volume . The phenomenon of diminishing trading volume shows that when the stock price rises, the chasing force is getting weaker and weaker, and the price has the meaning of rising to the end.

Operation plan after the Head and shoulders appear:
When the head and shoulders formed, you can decisively follow up the short order. The formation of the head and shoulders indicates the beginning of a new round of decline in the market, and the minimum drop is the distance from the head to the neckline. The profit is very substantial. Therefore, studying the formation of the Head and Shoulders is also a necessary analysis process for band enthusiasts.

Wave Count:
Free nse stock market head&shoulders wave analysis

The left shoulder: wave 3/A.
The first touch on the neckline: wave 4/B
Head: wave 5/C
The second touch on the neckline: wave A/1
The right shoulder: wave B/2
The ending point of the right shoulder: wave C/3

2) TrianglesFree nse elliottwave triangle calls

These are the most commonly used triangle patterns. In this motion, we are going to understand the triangle in terms of the Elliot wave. We’ll be talking about the classical triangle pattern in an upcoming educational series.

Wave Count:free nse elliottwave educational tips

A triangle forms in corrective waves. There are Four corrective waves in Elliott wave theory. The corrective waves are 2,4, B, and X.
There are four waves in a triangle which are A, B, C, D, E.
The starting point of wave A of the triangle is the ending point of impulsive wave 1/3/A/W. After the completion of wave E of wave 1/3/A/W, the Impulsive wave will initiate.

3) Double Top/Bottom:Free elliottwave educational analysis

In the chart, you can sometimes see the stock price fluctuations. The stock price fell back after reaching the highest price. After some sorting, it rose again to near the previous stock price level and then fell back. Two “normally highs” The high point is formed on the circuit diagram and will not be seen again in the short term.

Wave Count:free nse elliottwave doubletop & bottom count

In a Bull market, The first Top of the pattern represents the completion of the impulsive wave. The ending point of the Impulsive wave is the starting point of the corrective wave.
I started the wave count from the first top and labeled it as A, B, and C waves.

In a Bear Market, The first bottom of the pattern represents the completion of the impulsive wave. The ending point of the Impulsive wave is the starting point of the corrective wave.
I started the wave count from the first bottom and labeled it as A, B, and C waves.
After wave C is complete, we can ride the impulsive waves.

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