Cup and handle , Cup without handle chart patterns
I found Cup and handle or some call it saucer and handle chart patterns , to be quite a reliable chart pattern to trade.
Most of my money were made using this chart pattern. A picture paints a thousand words, so here are two actual trades I did using these cup and handle chart patterns.
See the lower part of the chart. It looked like a cup formed from 2001 to 2003.
A little double top formed at 2001 and 2003, just below the black line. There was a little double bottom just before & after 2003. In fact, if you remember from
learn to read charts page
and draw a horizontal support line from the low at 2001, you will notice that it did not break this support line in 2003. This little dip down is known as handle. There was also a tiny saucer and handle formed just before it broke above the black line although it was not as smooth as the one from 2001 to 2003.
I entered the trade above the black line @ 175 and exited the trade when it broke down past the black line with a nice little profit.
How did I find this trade?
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In 2003, I checked the company fundamental as described in buy and hold strategy page. Company EPS earnings, revenue were consistently up for the last few years and at that time, the stock market sectors -utilities were quite hot. And when I saw this cup and handle or saucer and handle chart pattern developing, I had no hesitation but to place a buy order with my stock broker.
Just another example showing how powerful cup or saucer and handle chart pattern is.
I entered the trade just above the red line and got out when it broke through the black line.
How did I find this trade?
This was recommended in some magazines and I did some fundamental analysis as described before. Saw the saucer and handle pattern forming and volume increasing, so I thought I got to have some of them.
If you were a bit like me being conservative/cautious, then these patterns are good for medium to long term investing.
How To Find Your Cup And Handle Or Saucer And Handle Stocks?
I came across RAMP scanner that can find Cup and handle and many other chart patterns. The software can scan free data from yahoo or from your existing data feed. They also offer a free trail, so if if you want to trade saucer and handle stocks, you may want to give this a try.
Click here for your
Ramp chart pattern scanner
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