GLD ETF Stock Chart Cup & Handle
The cup and handle pattern is a bullish continuation pattern that is often seen in stock charts. It is characterized by a cup-shaped formation followed by a handle-shaped formation. The cup is typically formed after a period of price decline, while the handle is formed after a period of consolidation.
The cup and handle pattern is considered to be a reliable indicator of a bullish trend reversal. However, it is important to note that no technical analysis pattern is foolproof. There are always exceptions to the rule, and the cup and handle pattern is no different.
Here are some of the key characteristics of the cup and handle pattern:
Cup: The cup portion resembles a rounded bottom or a "U" shape on the price chart. It is formed when the stock's price declines, then finds support and starts to recover. As the price continues to rise, it creates the curved shape of the cup. The left side of the cup represents the initial decline, while the right side shows the recovery.
Handle: After the cup is formed, there is usually a small, downward-sloping consolidation pattern called the handle. The handle is characterized by lower trading volume as compared to the cup, and it represents a brief period of profit-taking or a minor pullback. The handle can take various shapes, like a flag, triangle, or a small rectangle.