Screening Filters
Price: 5–200 USD
- Purpose: Focus on reasonably priced, actively traded stocks and avoid extremes (very low-priced penny stocks and very high-priced illiquid names).
- Rationale:
- Cup-and-handle patterns are most useful for tradable stocks where technical patterns actually attract institutional and retail attention.
- Very low-priced stocks often show noisy, erratic moves that can look like patterns but aren’t reliable.
- Extremely high-priced stocks can be less accessible and sometimes thinner in volume, making the pattern harder to trade.
Monthly Average Dollar Volume ≥ 500,000 USD
- Purpose: Ensure sufficient liquidity.
- Rationale:
- A cup and handle is a breakout pattern; for a breakout to be meaningful, you want decent dollar volume so that price moves are not just a few trades.
- Higher dollar volume suggests institutional participation, which tends to make classical chart patterns like cup-and-handle more reliable and easier to enter/exit.
Moving Average Relationship: PriceAboveMA20 and PriceAboveMA200
- Purpose: Confirm that the stock is in an overall uptrend and currently has positive short-term momentum.
- Rationale:
- A textbook cup-and-handle forms in the context of a prior uptrend, then a consolidation, then a continuation move.
- Price above the 200-day MA: Indicates a longer-term uptrend; this is the backdrop in which valid cup-and-handle bases typically form.
- Price above the 20-day MA: Suggests the stock is currently regaining short-term strength—consistent with the right side of the cup or the handle finishing and preparing for a breakout.
New High/Low: 52w_High and 20_High
- Purpose: Target stocks that are near or breaking out to new highs, a key characteristic of the “breakout” part of a cup-and-handle.
- Rationale:
- In a classic cup-and-handle, the breakout generally occurs when price pushes through prior resistance near the old high.
- 52-week high: Ensures we’re looking at names that are challenging or surpassing their long-term high—consistent with the rim of the “cup.”
- 20-day high: Zooms in on a shorter-term breakout attempt, aligned with the handle breakout area.
- Together, these filters help isolate stocks that are at or just emerging from the handle, not ones still buried in a deep base or far below prior highs.
1-Month Price Change %: -10% to +5%
- Purpose: Capture the “handle” portion—a modest pullback or sideways consolidation near the highs—while excluding names that have already exploded upward.
- Rationale:
- The handle is typically a mild consolidation or drift down from the high, not a crash and not a runaway rally.
- Allowing up to -10% over a month lets in stocks that have had a normal handle-like pullback, not a breakdown.
- Capping at +5% avoids stocks that have already made a big breakout move in the last month (which may mean the opportunity is already largely passed).
1-Year Price Change %: ≥ 25%
- Purpose: Ensure there is a strong prior uptrend—an essential ingredient for a valid cup-and-handle base.
- Rationale:
- A cup-and-handle is a continuation pattern; it works best after a meaningful advance.
- A stock that’s up at least 25% over the past year has shown enough prior strength that a new base and breakout can be part of a sustained bullish move, not just random noise.
Why Results Match the Cup-and-Handle Query
- They focus on liquid, tradable stocks where technical patterns matter (price and dollar volume filters).
- They require a solid prior uptrend (PriceAboveMA200 and ≥25% 1-year gain), which is foundational to a valid cup-and-handle setup.
- They target stocks near prior highs and attempting breakouts (52-week and 20-day high filters), matching the typical location of the rim of the cup and the breakout point.
- They shape the recent price action to look like a handle—modest pullback/sideways rather than crash or parabolic surge (1-month return between -10% and +5%).
- The combination effectively narrows the universe to stocks that are statistically more likely to be forming or emerging from a cup-and-handle pattern, even though the exact pattern shape still needs to be confirmed visually on the chart.
This list is generated based on data from one or more third party data providers. It is provided for informational purposes only by Intellectia.AI, and is not investment advice or a recommendation. Intellectia does not make any warranty or guarantee relating to the accuracy, timeliness or completeness of any third-party information, and the provision of this information does not constitute a recommendation.