This is a classic bullish continuation pattern, signaling a possible resumption of growth after consolidation. It often appears in a rising market.
Structure:
🔵Cup — a smooth U-shaped dip after a rise, indicates weakening sales and accumulation.
🔵Handle — a short correction or sideways movement at the top of the cup.
🔵Resistance line — a horizontal level connecting the peaks of the cup and handle.
How to trade:
🔵The pattern forms after an upward trend.
🔵Breakout upwards — the main buy signal.
🔵Profit target: the height of the cup, projected upward from the breakout point.
Strategies:
🔵Buying on breakout — a basic approach.
🔵Retest of the level — confirmation if the price returns to the broken resistance and bounces back.
🔵Take profit — at the target or at the nearest resistances.
📉Reverse pattern:
Inverted cup with handle — a signal for continued decline, works on the same principles in reverse.
☝️Tips:
🔵Wait for a clear breakout and preferably a retest.
🔵Look for volume confirmation: rise on breakout, decline in the handle phase.
🔵The most reliable is a smooth, shallow cup.
❗️ The main thing is not to rush: the pattern reflects accumulation by buyers, and the signal must be confirmed.