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CUP WITH HANDLE

 

 

Cup Characteristics:

0. Strong uptrend on left side of base
0. Correction between 20-40%
0. Bottom of base rounds out as sellers (red volume) dries up
0. Right side of base shows signs of support with light selling days and heavy volume buying days
0. Duration of CUP base 8-60 weeks depending on market conditions

Handle Characteristics:

0. Handle forms in upper half of the Cup on right side of base
0. Develops between 3-12% below the old highs of the left side of base
0. Price pattern should drift sideways or preferably downward on light volume and correct no more than 12%
0. Duration of HANDLE should be 1-5 Weeks

Pivot Characteristics:

0. Buy Point is when price crosses the high of the Handle
0. Look for strong buying volume as stock price shoots above handle resistance

 

 

 

FLAT BASE

 

 

 

Flat Base Characteristics:

0. Usually occurs from a F.I.T. stock that has broken out of a prior base pattern such as a Cup with Handle (As seen above) or Double Bottom
0. The base should move sideways or slightly down from its high, but price should not correct more than 12%
0. Volume should be light during this consolidation period
0. Duration of FLAT BASE should be more than 5 Weeks
0. Pivot or Buy Point occurs when stock surges above resistance or High of base on solid volume increase

 

 

 

The Double Bottom Base

 

Double Bottom Characteristics:

0. Pattern looks like a " W "
0. The 1st leg down is the stock correcting
0. Buyers than step in to push the stock up, but fail ( 1st leg up ) ( Middle leg of " W " )
0. Sellers step in to push the stock down and shakeout buyers in the 2nd leg down
0. 2nd leg down should equal or break briefly below 1st leg down
0. The Double Bottom appears more volatile than Cup with Handle because of the 2nd leg down
0. Institutional buyers quickly step in building the right side of the " W "
0. Pivot or Buy Point is when price breaks above the middle of the " W " ( 1st leg up ), as always look for a heavy increase in volume

 

The U Turn

 

 

 

 

The U Turn Characteristics:

0. Pattern looks like a " U "
0. Price runs up after former base pattern and starts to correct
0. Finds support at 10 week moving average or 50 day moving average
0. Sell off volume dries up as price bottoms out
0. Buyers begin to step back in pushing the stock up to its previous high
0. Pivot or Buy Point is when stock price breaks above previous high on solid volume

 

Charts courtesy of Bigcharts.com