ETN: Bullish Cup & Handle Pattern Targets All-Time HighsOverview:
On the daily timeframe (D TIMEFRAME), ETN appears to be forming a well-defined Cup and Handle chart pattern, a classic bullish reversal and continuation pattern. The price has recently completed the "cup" formation and is currently consolidating within what appears to be the "handle," right at a critical resistance level.
Pattern Identification:
The Cup Formation:
From approximately late January 2025 to late April 2025, ETN experienced a significant decline, finding a bottom around the 240-250 area, and then rallied back up to the neckline. This U-shaped recovery forms the "cup" portion of the pattern. The depth of the cup is substantial, indicating a strong base formation.
The Neckline (Current Resistance 333):
The "rim" of the cup is established at the 333 level. This level is highly significant as it acted as strong support in late 2024/early 2025 before the breakdown. Now, it has flipped to become a formidable resistance. The stock previously rejected this level around late May/early June.
The Handle Formation:
Following the first test of the 333 neckline, ETN pulled back slightly and has been consolidating in a shallower, rounded fashion, forming the "handle." This consolidation is crucial, as it allows for profit-taking by early buyers and builds energy for the next leg up. The handle is holding well above the 310.31 level.
Key Price Levels & Trade Setup:
Current Price: Approximately 330.70.
Key Resistance / Neckline: 333.00. This is the critical level to watch. A confirmed breakout above this resistance is necessary to validate the Cup & Handle pattern.
Initial Support: The bottom of the handle, around 310.31, serves as immediate support.
Stop Loss (SL): A sensible stop-loss would be placed just below the handle's low, specifically at 310.31. A daily close below this level would invalidate the bullish pattern and suggest further downside.
Target Price (TP): The traditional target for a Cup & Handle pattern is measured by the depth of the cup projected from the neckline.
Cup Depth: Approximately 380 ~240 (bottom) = ~140 points.
From the chart, the target is clearly marked as the All Time High 380.00. This aligns well with the pattern's measurement if the handle forms slightly lower or simply indicates the next major psychological and historical resistance. A move above 333 opens the path directly to 380.
Trading Strategy:
Entry: Traders could consider initiating a long position upon a confirmed bullish breakout above the 333 necklines. This confirmation could be a strong daily candle close above 333 or waiting for a successful retest of 333 as new support after the breakout.
Risk Management: With an entry around 333 and a stop loss at 310.31, the risk is approximately 22.69 points. The target at 380 provides a potential reward of approximately 47 points. This offers a favorable Risk/Reward ratio of roughly 2:1.
Invalidation: The bullish thesis is invalidated if ETN fails to break above 333 and instead breaks down below the handle's support at 310.31, especially on a daily closing basis.
Concluding View:
ETN presents a compelling technical setup with a maturing Cup & Handle pattern. The stock is currently poised at a pivotal resistance level. A successful breakout above 333 would signal significant bullish momentum, potentially driving the price towards its all-time high of 380. As always, solid risk management is paramount.
Disclaimer:
The information provided in this chart is for educational and informational purposes only and should not be considered as investment advice. Trading and investing involve substantial risk and are not suitable for every investor. You should carefully consider your financial situation and consult with a financial advisor before making any investment decisions. The creator of this chart does not guarantee any specific outcome or profit and is not responsible for any losses incurred as a result of using this information. Past performance is not indicative of future results. Use this information at your own risk. This chart has been created for my own improvement in Trading and Investment Analysis. Please do your own analysis before any investments.
