The big iPhone event Tuesday had something for everyone, including  (SNAP) - Get Report shareholders.

Apple (AAPL) - Get Report senior vice president Craig Federighi used Snapchart lenses as part of a demonstration of the iPhone X's augmented reality and facial recognition capabilities. The takeaway is, this could open up new AR features for Snap in the future. The stock reacted positively in Tuesday's session, but there has been a bullish scenario developing on the chart for the last two months.

Let's take a look at the daily pictograph.

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The price chart shows a steady decline that began shortly after it became publicly traded in March 2017. Last month's low formed a large bullish engulfing candle and sparked a bounce back up to the 50-day moving average. Since then, consolidation around the average has formed the handle portion of a cup-and-handle pattern. The cup portion of the pattern is delineated by the July and August rounded base formation. The cup-and-handle is considered one of the more reliable technical reversal or continuation patterns.

Snap shares have been holding above the $14.00 level, which acted as previous resistance, and just below the $15.50 level, also the rim line of the pattern.

The relative strength index entered an oversold condition as the pattern began forming early July, and began moving up and out of that zone just before the formation of the bottom. At the same time, moving average convergence/divergence was making a bullish crossover and now has moved above its center line. Volume improved over the last month and Chaikin money flow is well into positive territory and above its signal average. These readings reflect improving price and money flow momentum.

The cup-and-handle pattern projects an upside price objective measured by taking the depth of the cup and adding it to the rim line, and it targets the $20 area, which would be a 50% retracement of the stocks overall range. Snap is a speculative buy after an upper-candle close above the rim line using a close and disciplined trailing stop. There is a 19% short interest in the stock, which could help power the breakout move.

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The author is an independent contributor and at the time of publication had no position in the stocks mentioned.