InvestorQ : Is the Head and Shoulders pattern same as the Cup and Handle pattern in technical analysis?
prachi Patwardhan made post

Is the Head and Shoulders pattern same as the Cup and Handle pattern in technical analysis?

Answer
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1 year ago


Cup and Handle is totally different from a head and shoulder pattern and has a different indication and implication altogether. A “cup and handle” forms when, after an uptrend, the chart forms a large U-shaped curve (the “cup”) followed by a smaller dip before continuing upward (the “handle”). This pattern signals that the stock in question is bullish. If the pattern is completed, the price will likely resume its previous upward trend. Unlike the Head and Shoulders which is a signal of a trend reversal, the Cup and Handle is the affirmation of the current up trend. Cup and handle is used to understand the reinforcement of the trend and explains in case you want to double your position or sustain the position for a longer time period. If the right side of the handle breaks above the peak formed between the cup and the handle, it confirms that the pattern is complete and that the uptrend will resume.