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 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.

What is a cup & handle?

A Cup and Handle can be used as an entry pattern for the continuation of an established bullish trend. It´s one of the easiest patterns to identify. The cup has a soft U-shape, retraces the prior move for about ⅓ and looks like a bowl. After forming the cup, price pulls back to about ⅓ of the cups advance, forming the handle.

Does cup & handle pattern fail?

The cup and handle pattern success rate is quite high. However, note that cup and handle pattern failure may occur more frequently in overall bearish markets. Always use stops to minimize risk in case of a failed cup and handle pattern. Is a cup & handle pattern bullish or bearish?