Cup and Handle Chart Pattern Explained -- with David Moadel
welcome to looking at the markets with David Modell today I will discuss the
basics of the cup and handle stock chart pattern it can be used for intraday
trading and it could also be used for swing trading with a daily candlestick
chart which is what I'm going to mostly focus on today please be aware that like
all other patterns this one does not work a hundred percent of the time also
I just want to let you know that I have some free reports and if you go down
below this video you can and click on the description you
can download one or several or as many as you like and I co-authored these
reports and their financial reports with actionable ideas I think you'll like
them a lot no obligation we're not going to send you a bunch of junk just you
know put in your email address and get the report all right
so here we go let's take a look cup and handle winning stocks often start their
big runs by forming this pattern so this is obviously a bullish pattern if it
works out it resembles a tea cup viewed from the side C cup and handle right
kind of like this one kind of sorta you have to be able to use your imagination
for this one now the stock should run up at least 30% that's the prior uptrend
before forming the base then it should start selling off 15 to 30% from the
high when it reaches the floor and bottoms out institutional investors have
stopped selling their shares and have started buying again and I will let you
know that a lot of retail traders have a tendency to buy and sell at the wrong
time whereas the institutional traders they tend to get in closer to the bottom
so I'm looking for institutional or large-scale orders and when the selling
pressure ends then the large-scale institutional buyers come in more likely
at the right time than the retails so that's a sign that the selling pressure
had stopped the buying pressure is starting to come in and that's when the
handle starts to form the handle forms in the upper half of the base
okay so it's closer to the top than the bottom here and for swing traders it
should be at least five trading days long again that's you know five
candlesticks on the daily candlestick chart for intraday trading you're gonna
have to adjust all this to your timeframe now during the handle less
committed retail investors are being shaken out of the stock all right so
again the retail traders investors they tend to not do as well as the big
institutional investors and so they get they get head faked here it goes down
they might sell here after the shakeout the stock is now free to run if this
works out again doesn't work 100% of the time alright and don't look for exact
and exact rounding bottom pattern here it's usually pretty sloppy all right as
long as it generally adheres to this curvature here all right and so this is
a bullish pattern a continuation pattern if you will and when do you want to get
in well probably after the shakeout is finished the ideal buy point is here but
you can buy anywhere within this buying range okay you don't to wait too long
you don't want to buy way up here okay the idea is to buy right around here if
you can alright so let's take a look at a couple of examples this is AMD and
again you see it's not an exact science here you know all that all these
patterns tend to be a little sloppy in nature but this one is pretty close and
we have the cup and the handle here if you had gotten and right around here you
would have done pretty well for yourself that's AMD the daily stick candlestick
candlestick chart thanks to stock charts calm for these
charts this is Mellie Emmy Ally is the stock ticker and this is a much bigger
cup and handle okay so as you can see it could be multi week or even multi-month
really and then you can see the shake out here okay and then if you had bought
right after the shakeout and I know you can't see it here but it did pretty well
after that so that's another example of a cup and handle
all right so there you go that's a couple of examples and if you like that
cup and handle pattern and if you liked this video why not also give it a like
or thumbs up on YouTube and subscribe to my channel if you haven't done that
already please so you can get updates whenever I put out videos like this feel
free to comment in the comment section let me know what you think of cup and
handle patterns do you think it's accurate do you think it's actionable
and check out the if you want to get some free reports go below in the
description below this video and download as many as you like alright
thanks a lot I really appreciate it I'll talk to you again soon
you