Most common patterns

19 Nov 2016

 

 

 

Cup with Handle

  • Prior uptrend of at least 30%

  • Base Depth: 15%-30%

  • Base length: At least 7 weeks

  • Handle: Volume in handle should be light — depth of the handle should be 10%-12%, should form in upper half of base. Peak of handle should be within 15% of old high on left side of cup. The handle should form in the upper half of the base.

  • Ideal Buy Point: 5%  above the peak in the handle

  • Volume on day of breakout: At least 40%-50% above average
     

Double Bottom

  • Prior uptrend: 30% or more

  • Base depth: 40% or less

  • Base length: At least 7 weeks

  • Peak in middle of W: should form in upper half of base and should be below left-side peak

  • Undercut: Bottom of second leg down should be lower than bottom of first leg down

  • Ideal buy point

    • 5%  above the peak in the middle of the W

    • buying range: up to 5% above the ideal buy point

    • always buy as close as possible to the ideal buy point

  • Volume on day of breakout: At least 40%—50% above average

 

 

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