Is Cup and handle a bullish signal?

The standard cup and handle pattern is a bullish signal, but there is also a bearish version of this pattern called “Inverse Cup and Handle” pattern. An inverse cup and handle pattern forms with the bottom of the cup being at the top of the stock’s price movement.

What is a cup and handle chart pattern?

A Cup and Handle is a bullish continuation chart pattern that marks a consolidation period followed by a breakout. Chart patterns form when the price of an asset moves in a way that resembles a common shape, like a rectangle, flag, pennant, head and shoulders, or, like in this example, a cup and handle.

What happens if a cup and handle pattern is confirmed?

If a cup and handle pattern is confirmed, it will usually be followed by a bullish price move upward. You can pick a price target based on the size of the cup, but it becomes much less clear what will happen after the initial breakout from the cup and handle pattern.

What is a bearish cup & handle pattern?

The bearish Cup and Handle pattern forms in a downtrend and is traded as a bearish breakdown signal. So, you can use it to go short on the market if you want. This is how you trade the pattern: You have a sell signal when the price breaks below the lower trend line of the price channel that forms the handle.