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Cup and Handle Pattern

Continuation pattern · ~4 min read

The Cup & Handle is a bullish continuation pattern that signals a pause and subsequent continuation after an upward move.

Structure

• Cup: a rounded, U-shaped correction – not a sharp V. Both rims sit at roughly the same level.
• Handle: a small, shallow consolidation on the right rim, usually a slight downward drift in the upper third of the cup.

Signal & price target

A break above the right rim (resistance) is the buy signal. The classic target is the cup depth (rim to cup bottom), projected up from the breakout.

Quality criteria

• A rounded, symmetric cup – no sharp tip.
• The handle stays shallow and in the upper part of the cup.
• The cleaner the rim resistance, the clearer the breakout.