Cup and Handle Pattern
A bullish continuation pattern resembling a cup with a small downward handle, signaling a breakout to new highs after consolidation.
Quick Answer
A bullish continuation pattern resembling a cup with a small downward handle, signaling a breakout to new highs after consolidation.
What Is the Cup and Handle Pattern?
The Cup and Handle is a bullish continuation pattern popularized by William O'Neil. The "cup" forms a rounded bottom over weeks or months, followed by a smaller "handle"—a short consolidation or pullback on the right side. A breakout above the handle resistance confirms the pattern and often leads to a measured move equal to the cup depth. It appears frequently on daily and weekly stock charts.
How the Cup and Handle Forms
- 1Prior uptrend establishes the context
- 2Rounded U-shaped bottom forms the cup (typically 7-65 weeks)
- 3Left and right sides of cup at similar price levels
- 4Small downward or sideways drift forms the handle (1-4 weeks)
- 5Breakout above handle resistance confirms the pattern
How to Confirm the Pattern
Price Target Calculation
Measure the depth from the cup rim to the cup bottom, then project that distance upward from the breakout point.
Best Timeframes for Cup and Handle
How to Trade the Cup and Handle
- →Identify bullish continuation setups in stocks
- →Set price targets using cup depth projection
- →Time entries on handle breakout or retest
- →Confirm accumulation before markup phase
Common Mistakes to Avoid
Detect Cup and Handle Automatically
VaultCharts automatically detects Cup and Handle patterns on your charts. No manual analysis needed - the pattern is highlighted with entry zones and targets.