The cup with handle formation is a powerful continuation pattern. A prior uptrend must exist in order to rely on the cup with handle pattern. Below are two examples of cup with handle patterns that show the cup formation and the powerful breakout moves. In the case of ADSK, we've recently seen a retracement to the breakout area, which provides another entry point for the trader. KOG was highlighted in our Chart of the Day section less than two weeks ago while still in the handle part of the pattern. The breakout moves in both cases were explosive. Check these two out:
For more information and education on cup with handle patterns, check out the Chart School right here at StockCharts.
About the author:
Tom Bowley is the Chief Market Strategist of EarningsBeats.com, a company providing a research and educational platform for both investment professionals and individual investors. Tom writes a comprehensive Daily Market Report (DMR), providing guidance to EB.com members every day that the stock market is open. Tom has contributed technical expertise here at StockCharts.com since 2006 and has a fundamental background in public accounting as well, blending a unique skill set to approach the U.S. stock market.
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