IDEA:CUP AND HANDLE FORMATION

25 lug

The IDEA is currently forming a classic Cup and Handle pattern. This bullish continuation pattern suggests a potential upward movement once the pattern completes and breaks out. Here's a detailed breakdown of the pattern and the trading strategy:

1. Cup Formation:

The stock has undergone a rounded bottom, creating the "cup" part of the pattern.
The left side of the cup was formed due to a decline in price, reaching a bottom before rising back up to the original level.
This cup formation indicates a period of consolidation and accumulation, where buyers are gradually gaining control.

2. Handle Formation:

Following the completion of the cup, the stock entered a small consolidation phase, forming the "handle."
The handle typically slopes downward or moves sideways, showing a slight pullback.
This pullback is generally short-term and should not exceed more than one-third of the cup's depth.

3. Breakout Point:

The ideal entry point for traders is the breakout above the handle's resistance level.
Traders should look for a significant increase in volume during the breakout to confirm the move.

Target:

The target price can be determined by measuring the depth of the cup and adding it to the breakout point.
Target Price Calculation: [Breakout Point+ Cup Depth]
Target Price: 25

Stop Loss:

Place the stop loss below the lowest point of the handle to protect against a false breakout.
Stop Loss Price: 15.

Disclaimer: This analysis is for informational purposes only and should not be considered as financial advice. Always conduct your own research and consult with a financial advisor before making any trading decisions.