Wednesday, February 9, 2011

Cup and handle pattern

A technical chart pattern that indicates a security's price has begun to increase after declining and bottoming out.

The cup and handle pattern will be resembling like a shape of a tea cup on a chart. If one has to be doubly sure about the resultant cup formation than one should be on the look out for a “U” shaped formation with the handle having a slight sideways to downward drift with low volumes. If one is able to get the pattern over a longer time frame one is bound to see a powerful upside move and is one of the best bullish patterns.