Sunday, December 11th, 2016

CUP and handle Stock chart Pattern

This video is for March 09 and not Feb 09 as was wrongly recorded. Anyway the market has been on tear and looks like we may have reached a top. This looks like a CUP and handle stock chart pattern, which students of Bill O Neil should have no problem recognizing it at once.

This decent size cup formed as  result of sever declines  in January due to Walls Street’s temper tantrums and as time went by new buyers stepped in and took the market back to January highs forming an empty looking bowl. This type of chart patterns often results in bull markets and it is a significant bullish chart pattern. This one took about 6 weeks to form and its depth is just about right. Now we have to see if SPX forms a handle on it with some sideways action, or sells off a bit, shaking out weaker hands and than blasts  from there.

SPX_cup

This type of stock chart pattern bodes well for the coming months as the market will move much higher from here. How much higher? You can measure the depth of the cup from the middle and add that to the highest point on the right side of the the cup. Its not necessary a handle should form, but it usually does. The market may simply decide to just run up higher breaking out from the buy point and that may happen. The buy point is 10 cents above the right hand side  and I will label it in the next few days.

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