Don't Ignore This Chart!

Identifying the Cup with Handle Formation


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:

ADSK Cup w Handle 9.8.09
KOG Cup w Handle 9.8.09
For more information and education on cup with handle patterns, check out the Chart School right here at StockCharts.

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Tom Bowley
About the author: co-founded Invested Central in 2004 and served as the site's Chief Market Strategist for more than 10 years. Invested Central provides stock market education and guidance for those interested in making their own financial decisions. During his tenure at Invested Central, Tom co-hosted Market Open LIVE, a national radio broadcast that covered many of the largest markets across the U.S. In addition, he has spoken at various conferences throughout the United States and Canada and has taught thousands of traders across the globe how to trade equities more wisely with an emphasis on managing risk and intermarket relationships. Learn More
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