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.

What are the criteria for a cup and handle pattern?

The criteria that qualify the cup and handle pattern include: The trend: Being a continuation pattern, the pattern must occur in an existing trend. But the pattern works best in a new trend, not an old one. The cup: The cup should have the shape of a “U” and resemble a bowl with a rounding bottom.

What is a cup with handle retracement?

The cup is a bowl-shaped consolidation, and the handle is a short pullback followed by a breakout with expanding volume. A cup retracement of 62% may not fit the pattern requirements, but a particular stock's pattern may still capture the essence of the Cup with Handle. Trend.

What is a cup and handle breakout point?

The cup and handle breakout point is when the pattern is complete, and traders can expect a continuation of the price uptrend. For the novice and the experienced trader, this chart pattern can help determine points of entry and exit in a trade.