The cup and handle is generally:

Bullish. It is a bullish continuation pattern.

The handle should stay:

In the upper half of the cup. A shallow handle is healthier.

Cup depth projected from the breakout. Use the cup depth.

Cup and Handle

A rounded base followed by a small pullback before a breakout.

The cup and handle is a bullish continuation pattern. Price forms a rounded U-shaped cup, then a smaller pullback (the handle) that stays in the upper half of the cup.

The entry is a breakout above the handle high or the cup rim, ideally on rising volume. The target is the cup depth projected from the breakout.

It works best on daily and weekly charts of trending markets. Handles that drop too deep weaken the signal.

Key takeaways

Rounded base plus a small handle
Breakout above the rim or handle high
Target = cup depth

Quiz

The cup and handle is generally: Answer: Bullish. It is a bullish continuation pattern.
The handle should stay: Answer: In the upper half of the cup. A shallow handle is healthier.
The target is the: Answer: Cup depth projected from the breakout. Use the cup depth.

Educational content, not financial advice.