Deepak Fertilisers chart pattern shows a typical cup and handle pattern.
For those un initiated some salient points about the pattern.
The shape of the pattern is that of a rounding U shaped cup and a shallow smaller handle which is having a slightly downward drift.
The pattern can take six to sixty five weeks to form. (many a times this timelines are interpreted arbitrarily and what is important is the formation).
The points joining the tops of the cup is the neckline and that usually has traditionally been offering resistance from where stock prices react .
The handle portion is a smaller formation of shorter duration than the cup and has a downward drift. The hallmark of the handle is the very low volumes during its time frame. Immediately prior to handle formation and specifically after breakout, the volumes show a sharp jump.
Measuring implication is the height of cup added to the breakout point and this usually provides minimum price targets. Many a times these targets can be exceeded.
attached deepak fertiliser chart with comments in the charts. (this is not a recommendation but an example of a well known pattern shown in charts)
disc: bought today as a techno funda bet.
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