How to spot a Cup and Handle
- A rounded U-shaped bottom, not a sharp V
- Both sides of the cup reach a similar level: the rim
- A small pullback near the rim forms the handle
- Completes on a close above the rim
What the Cup and Handle tells you
The slow, rounded bottom shows sellers gradually running out and buyers slowly taking control. The handle is a last shake-out before price breaks above the old high.
How traders use it
- Enter on a close above the rim, ideally with rising volume
- Place the stop below the handle low
- A common target is the depth of the cup added to the breakout point
Common mistakes
- A handle that drops deep into the cup weakens the pattern
- Buying before the rim breaks
- Calling a sharp V-bottom a cup
See it on a real chart · EP 02Support & Resistance: How to Draw ThemWatch the free lesson →
Questions about the Cup and Handle
Is cup and handle bullish?
Yes. It is a bullish continuation pattern that completes when price breaks above the rim.
How deep should the handle be?
It should be small compared with the cup and stay in the upper part of it. A very deep handle makes the pattern less reliable.
For education only, not financial advice. The chart is an illustration of the pattern, not real market data. No pattern works every time; always use a stop-loss.