The chart below for Tennant Company (TNC) provides some excellent points for those trading the Cup with Handle Pattern. First take a look at the Multiple Right Sides formed in the Cup Portion of the formation. For many years I have written about how a stock gets stronger each time it forms a Right Side in the Cup. Some have referred to these as Ascending Patterns. Notice the stock traded below the Pivot Point TrendLine for nearly six months while in the Handle. Only once did it trade above the line. It did not Close above the line which it must do in order to be considered as a breakout. The Pivot Point TrendLine must be considered a powerful Support/Resistance Line, not only for this trade but for any time the price approaches this line in the future. (Remember This)
During the six months while in the handle this stock built up a tremendous amount of pressure. Notice the huge Volume on the day it closed above the Pivot Point TrendLine and the days since. This is a big time breakout and it shows why so many traders look for the Cup with Handle. Here at DEL Associates Limited LLC all we do is search for these and let you know when we find them as well as when they breakout.