Glossary · Candlestick & Chart Patterns
Cup and handle
A rounded dip followed by a smaller consolidation.
A cup and handle looks like a rounded “U” (the cup) followed by a shorter downward or sideways drift (the handle). Traders often read it as a bullish continuation pattern when price breaks out above the handle’s resistance with expanding volume.
The cup shows a repair of a prior selloff; the handle is a final shakeout or pause before buyers try to push to new highs. Soft, short handles are usually preferred over deep, lengthy ones in classic descriptions of the pattern.
Example
After peaking near $100, a stock slowly bottoms near $80, rounds back toward $98, digests in a small pullback to $94, then breaks out above $100.