DOW JONES INDEX GOES 'CUP AND HANDLE' PATTERN. HERE'S WHYA cup and handle is a bullish technical analysis pattern that signals a continuation of an uptrend and a potential buying opportunity. It appears as a U-shape (cup), followed by a slight decline or consolidation (handle), after which further price gains are expected. The pattern was popularized by William O'Neil in 1988.
Cup and Handle
Cup: A U-shaped movement that forms when an asset's price, after a rally, initially pulls back and then recovers to its previous highs.
Handle: After completing the cup, a slight correction or consolidation occurs, appearing as a downward-sloping line, sometimes shaped like a small cup. The handle typically forms on lower trading volume.
How it works
Buy: Traders look for a breakout from the handle amid rising trading volume, which is considered a buy signal. Trend Continuation: The pattern indicates that after a short pause, the asset is likely to continue its upward movement.
Target Calculation: The target price is often calculated by measuring the cup height and adding it to the breakout price to forecast the potential price movement.
What to Consider
The pattern can form on various timeframes, from intraday to monthly charts.
It is important to pay attention to the depth of the cup and handle, as well as the trading volume that confirms the signal.
Due to nearly 50% retrace we consider to take it up rn.
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Best wishes,
@PandorraResearch Team
