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 is the inverted cup and handle pattern?

The Inverted Cup and Handle is the bearish version that can form after a downtrend. TradingView has a smart drawing tool that allows users to visually identify this pattern on a chart. The cup and handle pattern is a continuation chart pattern that looks like cup and handle with a defined resistance level at the top of the cup.

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.

How long does a cup and handle pattern take to form?

The cup and handle pattern can take weeks or months to form. Traders use this indicator to find opportunities to buy securities with the expectation that their price will increase. While the cup and handle pattern can be useful as an indicator, there is no guarantee that stock prices will rise. Use a stop-loss to manage your risk.