Why the handle is the interesting part

What the Lesson Covers

1. 0:00A stock falls, takes months to come back, and stalls exactly where it started. That stall is the pattern.
2. 0:06The shape. A rounded base rather than a sharp V, a recovery to the old high, and then a small quiet drift below it before the level is tested.
3. 0:17Why it forms. Holders who were underwater finally get their price back. The handle is them leaving, patiently, and it ends when they are done.
4. 0:27The levels that matter. The rim, the bottom of the cup, and the high and low of the handle. Everything in the shape is a description of the rim.
5. 0:37Where it completes. It completes on a close above the rim with volume behind it. Below the handle's low, the supply the pattern said was finished clearly is not.
6. 0:48How often it follows through. Sixty-two to sixty-eight per cent, and only for the full construction — rounded base, shallow handle, a real prior high.
7. 0:57The same shape failing. Here the handle keeps going. One lower low, then another, and what looked like the last of the sellers was the first of them.
8. 1:08The tells. A handle deeper than a third of the cup, handle lows forming a sequence, or heavier volume on the handle's down bars.
9. 1:18A cup without a real prior high is just a curve.