Cup & Handle Practice
A cup and handle is a rounded base followed by a small dip — a pause that often resolves higher. Train to recognise the clean "U" and the shallow handle rather than forcing the shape.
A cup and handle is a bullish continuation pattern. Price carves a rounded "U" (the cup), recovers toward the prior highs, then drifts down in a small, controlled pullback (the handle). A breakout above the handle’s high signals the move may resume, with a target often measured from the cup depth.
How to spot it
- ✓ A prior uptrend leads into the pattern.
- ✓ The cup is a smooth, rounded "U" — not a sharp "V".
- ✓ The handle is a small, shallow pullback near the cup’s rim.
- ✓ Volume typically dries up in the handle and expands on the breakout.
- ✓ The signal is a close above the handle high.
⚠️ Common mistake
Forcing a deep, jagged "V" into a cup. The pattern works because the rounded base shows orderly accumulation; a sharp spike low is a different, less reliable structure.
Start with a worked example
Decide for yourself first, then open the explanation. The three questions below ask for the same judgement.
Which chart pattern is shown below?
- A Double Bottom
- B Inverse Head & Shoulders
- C Cup & Handle
- D Symmetrical Triangle
Show the answer and why
Answer: C. Cup & Handle
Read it in two parts. The long left-hand section: price slides down from a high, grinds out a rounded base, then climbs back to near where it started. That is the cup. The short right-hand section: as price approaches the old high it pulls back once, and that pullback is clearly shallower than the cup was deep. That is the handle.
It separates cleanly from a double bottom. A double bottom has two pointed lows with a distinct rally between them, while this base is a smooth transition with no such rally. It also differs from an inverse head and shoulders, which has three troughs with the middle one deepest, whereas here the base is a single continuous arc.
The decisive detail is that the handle has to be shallow. If that final pullback drops back toward the bottom of the cup, it is no longer a handle and the pattern no longer holds. That is where this one is most often misread.
Three questions on this pattern
Not three of the same chart — the other options are the patterns this one gets mistaken for.
Which chart pattern is this?
FAQ
How deep should the handle be?
Shallow — typically a fraction of the cup’s depth. A deep handle that erases most of the recovery weakens the pattern. This page is practice, not advice.
Is it bullish or bearish?
It is a bullish continuation pattern, most reliable after an existing uptrend and confirmed by the handle breakout. Not financial advice.