Textbook patterns - I see

    Posted by z0ned on 6th of Apr 2021 at 09:03 pm

    Textbook patterns - I see a lot of posts here about "textbook cup and handle" and other patterns so I thought it might be useful to post the actual textbook definition of a {C&H} by the man who identified it, William O'Neil:

    • 1. The C&H is a continuation pattern and forms during an uptrend.
    • 2.  It should form above the 200 dma
    • 3. The cup should be a "U" shape, not a "V"
    • 4. The bottom of the cup should be no more than 35% below the previous high
    • 5. The bottom of the handle should be no more than 15% below the previous high
    • 6. The cup + plus handle pattern should be at least 7 weeks long
    • 7. The length of the handle should be a minimum of 1 week
    • 8.  Volume should dry up in the handle phase.

    This pattern and more are defined in his book How To Make Money In Stock - a highly recommended read.


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