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Want to Make Hot Money? Check out These 10 'Cup and Handle' Stocks

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Want to Make Hot Money? Check out These 10 'Cup and Handle' Stocks Rahul Oberoi | July 26, 2017 Want to make hot money? Check out these 10 ‘Cup and Handle’ stocks A cup without a handle is difficult to handle. Same is the case with stock markets. Technical charts show that a stock with 'Cup and Handle' pattern is easy to identify. As the name suggests, there are two parts of this pattern - one is U-shape cup and another one is small handle. A cup usually forms after an advance move, it looks like a 'Rounding Bottom'. After the high formed on a right-hand side (i.e. Cup), there is a pullback which ideally forms a 'Handle' that shows a final pullback before the big breakout. The said pullback should usually retrace around one-third of a cup. Monil Shah, Senior Technical Analyst, Way2Wealth Brokers said, "The lesser it retraced, the more bullish the formation is. After this formation, one can draw a trend line from the left side of the cup, connecting the right handle. We should see substantial increase in volume activity during the breakout above the handle's resistance. The projected target after the breakout can be estimated by measuring the depth of the cup. The distance from the right side of the cup to the bottom of the cup will be added to the handle resistance.” Volumes also play an important role in validating the price pattern. Pankaj Pandey, Head-Research, ICICI Direct said, "Volumes are typically light at the base of cup formation and generally increase as the stock moves back toward its old high. As the stock breaks out above resistance marked by the handle, volume typically increases. A breakout from the handle likely signifies a continuation of the stock's rally." According to market experts, a profit target is determined by measuring the distance between the bottom of the cup and the pattern's neckline level, and stretching that exact level for upside movement from the neckline will give us a target level. Stop level would be the low of the handle's formation. We have collated a list of 10 stocks that have just formed the 'Cup and Handle' pattern and are looking good on charts. Check them out! Analyst: Monil Shah, Senior Technical Analyst, Way2Wealth Brokers Apollo Tyres Looking at the weekly chart, Apollo Tyre has formed a Cup & Handle formation after a long protracted up move. During late April 2017, the stock confirmed its breakout the said pattern. The conservative target of this pattern comes near Rs 336. One can accumulate this stock at current level and use any dip towards Rs 230 as an opportunity to add further. Stop loss should be placed near Rs 210. Bata India The stock has formed a bottom on daily chart near Rs 397 and rallied sharply higher till Rs 590. Subsequently, we saw a pullback which eventually resulted into a formation of Bullish Cup & Handle formation. The said pattern will be confirmed once stock breaches the horizontal trend line which is pegged near Rs 590. The conservative target of said pattern comes near Rs 672. Strict stop loss should be placed at Rs 550. Analyst: Pankaj Pandey, Head of Research, ICICDirect.com Mahindra & Mahindra Financial Services Brokerage ICICIdirect is positive on Mahindra & Mahindra Financial Services with a target price of Rs 463. One can keep a stop loss at Rs 359. Time period given by the brokerage is 6 months when the scrip will achieve the given target price. Shares of the company closed 9.42 per cent up at Rs 397.95. Page Industries The stock has formed a 'Cup and Handle' pattern on weekly charts. ICICIdirect.com believes the stock can touch Rs 20,700 in the next 6 months. One can keep a stop loss at Rs 14,730. Nestle India The brokerage is positive on Nestle India with a target price of Rs 8,400. One can keep a stop loss at Rs 6,040. The scrip can achieve the given target in next 6 months. Analyst: Jay Thakkar, CMT, HOD Technical and Derivatives Research, Anand Rathi HSIL HSIL had recently formed a 'Cup and Handle' pattern on weekly chart. Anand Rathi has 'Buy' on HSIL with a target price of Rs 505 and stop loss of Rs 324. The scrip was at Rs 378.95 on July 25. ACC Market participants can 'Buy' ACC with a target price of Rs 2,400 and stop loss of Rs 1,541. The scrip closed at Rs 1725 on Tuesday. Analyst: Mustafa Nadeem, CEO, Epic Research Infosys Momentum indicator MACD is also hovering above the signal line, showing a bullish trend. Epic Research is positive on Infosys with a target price of Rs 1,060. Keep a stop loss at Rs 965. The scrip was at Rs 994.15 on July 25. Analyst: Sumeet Bagadia, Associate Director, Choice Broking HCL Technologies On a weekly chart, the stock has given a bullish breakout of 'Cup & Handle' formation. Normal tendency of the pattern is a bullish reversal, here it acts as a continuation pattern. Moreover, this pattern has almost taken 1 year and 8 months for pattern formation. Furthermore, the stock has formed a strong long bullish body with above average volume at breakout levels which suggest the strength of breakout. Bollinger band also has given bullish breakout of an upper band which suggests volatility may increase in near term. Choice Broking is bullish on HCL Technologies with a target price of Rs 1075. One should keep a stop loss at Rs 796. HCL Technologies was at Rs 895 on July 25. Wheels India Besides a bullish breakout of 'Cup & Handle' pattern, strong big opening body of 'Marubozu' candlestick at breakout levels shows strength of breakout. One can 'Buy' Wheels for the target price of Rs 2,074 and keep at stop loss at Rs 1,083. The scrip was trading at Rs 1,450 on July 25. Market outlook Market experts are looking positive on the further movement of benchmark NSE Nifty index. The 50-share index is consistently soaring high and reaching new peaks day by day. On daily charts it has been making higher highs and higher lows with constant volumes. Pattern analysis shows that the market is trading well above the trend line drawn from the 9,200 level. Moreover, the index has just broken out of the consolidation range of last seven sessions recently with heavy volumes which show the strength in the trend. The secondary indicators like RSI and Stochastic are also supporting the upside going forward. According to SMC Investments and Advisors, the index now has to continue to hold above 9,800 levels to witness an up move towards 10,250 and possibly 10,500 in next 3 to 4 months. On the downside, supports are seen at 9,800 and then 9,700 levels respectively. (Views and recommendations given in this section are the analysts' own and do not represent those of ETMarkets.com. Please consult your financial adviser before taking any position in the stock/s mentioned.) Article Link: http://economictimes.indiatimes.com/markets/stocks/news/want-to-make-hot-money-check-out-these-10-cup-and- handle-stocks/articleshow/59767738.cms .
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