| Cup
and Handle |
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A
pattern on bar charts. The pattern can be as short as seven weeks
and as long as 65 weeks. The cup is in the shape of a U. And the handle
has a slight downward drift. The right hand side of the pattern has
low trading volume.
As the stock comes up to test the old highs. The stock will incur
selling pressure by the people who bought at or near the old high.
This selling pressure will make the stock price trade sideways with
a tendency towards a downtrend for 4 days to 4 weeks...then it takes
off.
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It
looks like a pot with handle. Investors have made a lot of money using
this pattern which is not too difficult to detect. Personally, this
is one of the most profitable price patterns we've ever encountered. |
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Dictionary
