Technical Analysis: Chart Patterns - Cup and Handle

Cup and Handle

The Cup and Handle is a bullish continuation pattern where an upward trend has paused, but will continue when the pattern is confirmed. The ‘cup’ portion of the pattern should be a “U” shape that resembles the rounding of a bowl rather than a “V” shape with equal highs on both sides of the cup. The ‘handle’ forms on the right side of the cup in the form of a short pullback that resembles a flag or pennant chart pattern. Once the handle is complete, the stock may breakout to new highs and resume its trend higher.