DPS Cup and Handle Breakout

Cup and Handle Breakout -DPS

The indexes closed mixed today after the Fed announced an interest rate hike of a quarter of a point. This is the first rate hike in months and it signals that the central bank has a brighter outlook on the economy as a whole. Fed Chair Janet Yellen also upgraded the forecast for growth and unemployment. While rates are rising now, they are still very low historically so if you’re in the market for big-ticket items, now is a good time to buy.

Cup/handle DPS

A new Cup and Handle pattern has formed on DPS.

CPS5 Cup and Handle

DPS is sporting one of my favorite patterns, the Cup and Handle. The Cup with Handle pattern is a bullish continuation pattern that marks a period of consolidation followed by a breakout. There are two pieces to this chart pattern, the cup and the handle. Buried the lead didn’t we? The cup forms when prices rise in a gradual manner which looks like a bowl when charted. When the cup is fully formed, a trading range emerges on the right side of the char and the handle is identified. A price continuation is signaled when a symbol breaks out from the handle’s range.

We see a fantastic example of this pattern above on DPS. The cup formed from late April to late May and the rangewas just broken today. It is also a nice coincidence that the range also coincides with the 50 SMA. Volume is also on the rise which gives us more confirmation that a price increase is likely. If this pattern plays out, look for a push into the $95-$96 zone.Cup and Handle Pattern

As mentioned above, this signal was fired by CPRM6 CPRM6 automatically finds stocks with the strongest patterns in the market. CPRM6, also findS the best patterns in ALL time-frames. It also compares patterns to higher time-frames to insure maximum accuracy. To learn more about CPRM6, check it out here!
SW

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About the Author

Ryan has been with Nirvana since 2012 and has been manning the trading desk since Day 1. He was one of the founding members of Nirvana's Trading Lab and also TraderSource.com along with Ryan Olson and Russell Casperson. Ryan logged more than 3,500 hours trading and educating live in the Lab. He is also the lead author of SignalWatch.com. Ryan is a seasoned educator and has conducted numerous educational webinars and is an OmniTrader University instructor. Ryan prefers swing trading and position trading. Outside of the market, Ryan has passions for the outdoors, baseball, exercise, coffee, pop-culture and spending time with his family.

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