Cup and Handle Pattern

The cup and handle pattern is a bullish trading formation that looks like a teacup with a handle. It forms with a "U"-shaped base (the cup) and a small downward drift (the handle). This pattern suggests the stock price may rise.

The cup forms during a consolidation period after a downtrend. The handle then appears as a brief pullback. When the price breaks above the handle's resistance level, traders often see this as a buy signal, suggesting the upward trend will continue.

This pattern tends to be more reliable on longer-term charts—daily or weekly timeframes. Yet no pattern guarantees success, so it's important to confirm signals using other technical indicators and fundamental analysis.

Examples

Cup and Handle pattern formation on stocks, Indices and ETFs