Continuation patterns
Cup and handle
Usually bullish
A rounded base (the cup) followed by a small, shallow pullback near the rim (the handle).
What a cup and handle tells you
The handle is the quality check: a shallow, orderly drift shows that the base is not being abandoned. A deep handle usually means the base has failed.
Why it forms
Long accumulation builds a base; a final shakeout removes the impatient before the breakout.
How traders enter it
Entry on the break above the handle high, stop below the handle low, objective the cup depth projected from the rim.
How it fails
Handles deeper than about a third of the cup, or handles that form on the left side of the cup, are the common failure. V-shaped cups are less reliable than rounded ones.
That last section is the one worth rereading. A pattern is only useful because it comes with a level that proves you wrong — without one you have a shape and a hope.
People also ask
Is a cup and handle bullish or bearish?
A cup and handle is usually read as bullish, but only once it confirms. Before the confirming break it is a shape, and shapes fail. Context decides more than the label does.
How do you trade a cup and handle?
Entry on the break above the handle high, stop below the handle low, objective the cup depth projected from the rim.
When does a cup and handle fail?
Handles deeper than about a third of the cup, or handles that form on the left side of the cup, are the common failure. V-shaped cups are less reliable than rounded ones.
Can ChartLens spot a cup and handle for me?
Yes. Photograph or screenshot any chart and ChartLens names the pattern if it is clearly formed, with a confidence level and whether it is forming, confirmed or failed — and says nothing if it is not there.
Last updated .