Wendy is shocked by the Cup and Handle

• Posted by Greg Harmon
• on December 2nd, 2015

This was the face that the Wendy’s girl had when I told her about the Cup and Handle setting up in the stock. She could not believe it! But it is real. Let me explain.

After strong run higher from October 2014, the stock started to consolidate in 2015. That consolidation lasted for 6 months. In July it started to plunge, finally making a bottom October 2, 2015, a year later, and at a higher low. The low base allowed the stock to gain energy and then thrust higher again to start November. The move up crossed the 200 day SMA just before Thanksgiving and has been consolidating since.

This is right at the prior resistance area from August, on the way down. One way to interpret this action is as the yellow Cup. You do not have to look far to the left though to see that there is a possible bigger Cup back to the 11.50 high. The yellow Cup is now building a Handle as it consolidates. A break to the upside would target a move to 12.75. Not bad. And it if stalls at 11.50 and builds another handle then target for that Cup and Handle would be to 14.50.

Now you know why Wendy looks so shocked.

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