C&H formation

BSE c&H formation

Cup and Handle Pattern Overview

1. Cup Formation:

A rounded bottom resembling a "U" shape.

Indicates a period of consolidation followed by a recovery.

2. Handle Formation:

A short-term consolidation or pullback resembling a downward-sloping flag or channel.

Prepares for the breakout.

3. Breakout:

Occurs when the price breaks above the resistance level formed at the top of the cup.

Typically followed by high volume.

Key Components to Look For

1. Cup Depth: The cup should not be excessively deep; a shallow retracement is ideal.


2. Handle Length: The handle should not retrace more than 50% of the cup's height.


3. Volume: Decreasing volume during the handle phase, followed by a spike on breakout.


4. Timeframe: Typically observed on daily or weekly charts.

Example Analysis

1. Stock: Let’s take TCS as an example (or any BSE stock).


2. Timeframe: Daily chart.


3. Steps:

Identify a rounded consolidation phase forming the "Cup."

Look for a small retracement (forming the "Handle") near the cup's resistance.

Watch for breakout with volume above the resistance line.

Targets and Stop-Loss

Target: Measure the height of the cup (from the bottom to resistance) and add it to the breakout point.

Stop-Loss: Place it slightly below the handle's lowest point.