Since some may not be familiar either with the paper OR the pattern, I'll cut and paste the article here for your edification... Sorry, I can't post the chart of CTSH, but you can look at an ARUN chart and sorta follow along.
"You’ve got to respect and understand the classics.
In books, there’s “The Great Gatsby.” In the realm of American food, you’ve got the burger and fries. And when it comes to chart reading, the most classic pattern is the cup with handle.
For decades now, investors who know how to spot this pattern have been reaping profits.
The best way to become more familiar with any stock chart pattern is by looking at examples. So it’s worth studying the cup-withhandle base that Cognizant Technology CTSH formed in 2004.
The left side of the pattern began to take shape in January 2004, as Cognizant embarked on what ended up becoming a sevenweek losing streak 1 . It wasn’t until June that Cognizant began etching the right side of its base.
In general, a cup-with-handle structure should be at least seven weeks long. But it could also form over the course of a year, or an even longer period of time.
The correction within the cup typically should not exceed 35%, and Cognizant fit the bill as it corrected 31%.
The handle part of the base represents one last shakeout of weak shareholders before the stock moves to new highs. You generally want to see calm action and just a mild correction within the handle.
A good handle will correct only 8% to 12% or less. You might see a slide of up to 15%, but anything beyond that definitely is not ideal. In Cognizant’s case, the handle — which began to develop in July — featured a correction of 14% 2 .
A handle also should be at least a week or five trading days in length, although they can be longer. Cognizant took about four weeks to sketch its handle.
With any breakout from a base, you want to see strong turnover as the stock moves out of the consolidation. Cognizant certainly delivered convincing volume as it broke out past a 26.74 entry in late July 2004 in big volume 3 .
However, with the market in poor shape, Cognizant fell more than 8% from that buy point. Investors had to sell and cut losses.
The market returned to a confirmed uptrend Aug. 18. The stock rallied again and cleared the 26.74 buy point for good. It also formed a tighter two-week handle in September, offering a new chance to add shares.
Some chartists might think Cognizant’s pattern also resembled a double-bottom base. But the middle peak in April was a bit low."