When it comes to technical analysis, few chart patterns are as reliable and powerful as the cup with handle formation. Recently, something interesting unfolded on the daily chart of NRB Bearing Share—a clean breakout from this exact pattern, backed by solid volume and technical support from the 100-day moving average. Let’s dive into the details of this bullish setup and understand what makes it so promising for traders and investors alike.
🧠 What Is a Cup with Handle Pattern?
Before we get into the specific case of NRB Bearing Share, it’s important to understand the pattern itself. The cup with handle is a bullish continuation pattern that resembles the shape of a tea cup. Here’s how it typically plays out:
- 📉 The Cup: A rounded bottom that reflects a gradual shift in market sentiment from bearish to bullish.
- 📊 The Handle: A slight pullback or consolidation after the cup is formed, representing a pause before the next leg up.
- 🚀 The Breakout: Once the handle resistance is breached on strong volume, it often results in a sharp upward move.
This pattern is well-respected among chartists for its consistency and effectiveness—especially when supported by major moving averages like the 100-day MA.
🧐 What’s Happening in NRB Bearing Share?
The chart of NRB Bearing Share presents a textbook example of the cup with handle pattern. Here are the highlights:
- 🔄 The cup formation began after a corrective phase, during which the price took support around the ₹195 level.
- 📉 The price then gradually recovered, forming a rounded base, with low volatility and healthy consolidation.
- 🛠️ A short handle was created as the price pulled back modestly from the ₹243 zone.
- ✅ Finally, the stock broke above the resistance near ₹243 with strong bullish momentum, accompanied by a noticeable spike in volume.
What’s especially encouraging is that the base of the cup found support at the 100-day moving average. This gives additional confidence to technical traders, as major moving averages often act as dynamic support levels in strong bullish trends.
🧭 Why the 100-Day Moving Average Matters in NRB Bearing Share
The 100 MA (moving average) isn’t just a number on the chart—it plays a pivotal role in confirming the trend strength.
- 📌 During the formation of the cup, NRB Bearing Share took a bounce off the 100 MA, indicating that buyers stepped in at a technically significant point.
- 📈 A successful test and rebound from the 100 MA often signal that institutional investors may be accumulating the stock.
- 🧲 When the breakout aligns with a moving average bounce, it increases the probability of a sustained rally.
This confluence of signals—pattern breakout and MA support—adds weight to the bullish case for NRB Bearing.
🔍 Volume Confirmation: The Hidden Clue
Volume is often the silent validator in technical patterns. In the case of NRB Bearing Share, the breakout occurred with a sharp increase in volume. This is crucial because:
- 🔊 Breakouts without volume can easily turn into false signals.
- 📊 Strong volume confirms that the market agrees with the breakout, attracting more participants.
The visible spike in the volume bars during the breakout day is a clear sign of conviction. It tells us that this wasn’t just a casual move—it was a move backed by real buying interest.
🧵 Final Thoughts on NRB Bearing Share: Pattern Meets Momentum
What we’re seeing in NRB Bearing Share is a beautiful marriage of pattern, momentum, and technical support. The cup with handle formation is not just visually appealing—it tells a story of accumulation, consolidation, and eventual breakout.
Here’s why this breakout deserves attention:
- ☑️ Classic technical pattern with high success rate.
- ☑️ Support from a long-term moving average (100 MA).
- ☑️ Breakout on strong volume.
- ☑️ Market structure shifting in favor of bulls.
Disclaimer: This article is for informational and educational purposes only and does not constitute investment advice, stock recommendation, or a solicitation to buy or sell any securities. The analysis and opinions expressed are based on publicly available data and personal observations. Readers are advised to do their own research and consult a SEBI-registered investment advisor before making any investment decisions. The author and the blog will not be held liable for any financial losses incurred. Investing in the stock market is subject to market risks
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