The cup and handle looks like a teacup from the side: a rounded "U" (the cup), then a small pullback (the handle) near the rim.
Trading it
- Mark the rim: the highs on both sides of the cup.
- The handle should be a shallow pullback, ideally in the upper half of the cup.
- Buy the close above the rim; stop below the handle.
- Target = cup depth, projected up from the rim.
Wick says
Fancy a cup of tea? Bullish tea. The handle is where the market sips before the breakout.
Key takeaways
- Rounded bottom + shallow handle + rim breakout.
- Usually a bullish continuation pattern.
- Target = depth of the cup.