The cup and Saucer has a continuous pattern. This pattern is formed by two rounded bottoms, the first is deeper and wider than the second. The height of the cup and the handle will be aligned along a straight horizontal resistance. This is the neckline of the pattern.
A few rules must be noted for the pattern to be valid.
The Cup and Saucer has to be preceded by a significant upward movement. The lowest at the bottom of the cup has to be less than 50% of the upward movement preceding the pattern. The lowest at the bottom of the handle must be less than 50% of the height of the cup.
The shape of the two bottoms of a rounding bottom reflect the gradual breathlessness of sellers. Buyers take advantage once the neckline breaks (psychological threshold), the purchasing power will become very strong.
The target pattern is calculated by plotting the height of the cup at the break point. But it is more advisable to defer only half the height of the cup according to the studies of T. Bulkowki.
Here is a graphic representation of a cup with handle:
– In 73% of cases, the target advised for this pattern is reached (half the height of the pattern).
– In 74% of cases, a pullback occurs on the neckline.
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