What is the Cup with handle pattern?

The Cup with Handle is a bullish continuation pattern that marks a consolidation period followed by a breakout. It was developed by William O'Neil and introduced in his 1988 book, How to Make Money in Stocks . As its name implies, there are two parts to the pattern: the cup and the handle.

What is an 'inverted cup and handle' pattern?

An ‘inverted cup and handle’ is a chart pattern that indicates bearish continuation, triggering a sell signal. Think of it as an upside-down cup and handle. If you look at the regular cup and handle pattern, there is a distinct ‘u’ shape and downward handle, which is followed by a bullish continuation.

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

It may take six months or longer for the cup pattern to form, but the handle forms much faster, ideally within four weeks. The entire pattern can also form within minutes or days. Technical analysts watching the cup-and-handle pattern try to buy when the price breaks out from the handle.

What is a cup-and-handle candlestick pattern?

The cup-and-handle is a candlestick pattern that indicates a cup-shaped price consolidation. This involves a downward price movement, a stabilization period, then a price increase of about the same amount as the downward movement. This is followed by a sideways pullback between the high and low of the cup shape, forming the handle.