One identification method for a standard cup and handle...
• The Handle: Look for an appendage hanging off the cup's right side. It should be at least five days long, and drop 8% to 12% — less is OK, more is a problem. Also, the handle should appear in the upper half of the base. (Add the cup's top and bottom, divide by two. Do the same for the handle. If the handle's midpoint is lower than the cup's, you're looking at a serious flaw.) Volume should be low. This is a stock's quiet period. It failed in its stab to reach new highs. That's how the cup formed in the first place. Now, impatient longs unload into smart, patient hands. That's the handle. Those smart hands don't want to attract attention. It's like fishing: Make too much noise and the fish will scurry away. The handle should slope downward. Sideways may be OK, but an upward-sloping handle is a fatal flaw. The handle is a quiet shakeout pattern. If it's wedging higher, only a few people are getting in, not out.
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