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.

Tom Bowley
About the author: is the Chief Market Strategist at, where he provides stock market education, guidance, and trading strategies using a unique combination of technical, fundamental, and historical analysis. Tom provides members with four portfolios (Model, Aggressive, Income, and Value), all designed to beat the benchmark S&P 500, and a revolving Watch List of hundreds of companies reporting strong quarterly earnings (must beat both revenue and EPS estimates) and exhibiting technical strength as well. These companies comprise EarningsBeats' annotated Strong Earnings ChartList (SECL), from which Tom trades exclusively. Tom writes a Daily Market Report (DMR) for members to include an executive summary, market outlook, sector/industry watch, and trading ideas. Learn More
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