1. A pattern that is formed after a pullback from a swing high rallies back strongly to the prior swing high and stalls due to overhead resistance. The security then stalls much like a bull flag with slight downward pressure before breaking out of overhead resistance.
2. The power of a Cup and Handle lies in the fact that after hitting overhead resistance from the prior swing high, a very minor correction is put in. The stock then breaks out past resistance which can be a sign that demand for the security may be increasing.
3. Cup and Handle patterns can be stronger when the next logical place of resistance on the chart after the breakout is a considerable distance away. |
