Chart Patterns  |  APR 2011

Identifying Cup Formations Early by Giorgos Siligardos

Here’s a simple mechanical recognition method for identifying possible emerging cup formations. In my article “Identifying The Cup (With Or Without The Handle),” which appeared in the February 2006 Stocks & Commodities, I introduced a simple mechanical algorithmic method for identifying cup formations (also known as rounding bottoms) in their late phase. The core part of the algorithm was based on the idea of using a virtual grid on the chart. Since then, I have been asked by technical analysts to provide an algorithm for identifying possible cup formations in their early phase. This time I will show you how you can easily use the grid technique for spotting possible cup formations during their development.

by Giorgos E. Siligardos, Ph.D.