An invented price line: a rise, a rounded dip back to the same height, a smaller drift down, and then a further rise, outlined by a curve under the cup, a level across its rim and two short lines round the handle.
An invented chart, drawn to show the shape of a cup and handle. Not market data.
Also searched ascup with handle · cup and handle chart pattern · cup and saucer · inverted cup and handle
How to recognise a cup and handle
- A rise comes before the cup.
- The cup is rounded, a U and not a V.
- Both sides of the cup reach about the same height.
- The handle is shallow: it stays in the upper part of the cup.
What it is taken to mean
It is read as a rise that paused, shook out the holders who wanted to sell at the old high, and then resumed. The handle is taken as the last of that selling. A close above the rim is treated as the earlier rise carrying on.
That is a reading, and no more. A pattern is a description of what a price did, not a forecast of what it will do. Textbooks file this one under “continuation shapes”, which is a habit of naming and not a rule the market keeps.
How it is conventionally measured
The textbook measure is the depth of the cup, from its lowest point to the rim, taken up from the rim. It is a convention for describing the size of the shape. It is not a prediction.
What traders check
- The shape of the cup. A sharp V is a different thing from a slow turn.
- How deep the handle is, against the depth of the cup.
- Whether the price has closed above the rim, or only approached it.
- The time frame. Textbook examples are drawn on daily and weekly charts.
Where people go wrong
- Seeing a cup before its right side has reached the rim.
- Calling any dip after a recovery a handle, however deep.
- Treating the depth of the cup as a target.
On a real chart
Textbook shapes are rare. A real chart is ambiguous: the peaks are uneven, the lines can be drawn two or three ways, and the same candles are a cup and handle to one reader and something else to another. Most shapes are also recognised only once they are finished, which is after the move they are said to announce has begun.
The picture on this page is invented. It was drawn by hand to show the shape as plainly as possible, with every awkward detail left out. It is not market data and it records nothing that happened.
Questions people ask
- Is a cup and handle bullish?
- It is classed as a bullish continuation shape: a pause within a rise, completed by a close above the rim. Its mirror image, the inverted cup and handle, is classed as bearish. Both classes describe drawings.
- How long does a cup and handle take to form?
- Textbooks describe cups that last from several weeks to many months on daily charts, with a much shorter handle. There is no fixed length.
- Does a cup and handle predict a rise?
- No. It describes what a price did while the shape formed. Published studies of chart patterns disagree about whether they tell anything about the next move, and the tidy examples in textbooks were chosen afterwards, when the outcome was known. It is one observation to weigh with others.
The words on this page
An explanation for study. It is not advice, a recommendation or a forecast, and a pattern described here says nothing certain about what a price will do next.