A Detailed Explanation of a Cup and Handle Formation

The market has nearly had vertical rebound. Now I expect it, and many individual stocks to have a period of consolidation. This could lead to the formation of one of my favorite technical chart patterns, the cup and handle, that will set up for a next leg higher. 

The cup and handle pattern is a bullish continuation formation, it is one of the newer chart formations and can be easily identified on a price chart. This chart pattern was first popularized by William J. O’Neil in the first edition of his 1988 book, How to Make Money.

In order for the cup and handle setup to have the highest odds of succeeding, it should come after…

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