Chart patterns › Cup and handle

Cup and Handle Pattern

The cup and handle is a bullish chart pattern shaped like a tea cup: a rounded U-shaped dip and recovery (the cup), followed by a small pullback (the handle) before a breakout.

Cup and handle chart pattern
Cup and handle: a rounded bottom, a short pullback, then a break above the rim.

How it forms

  1. The cup: after a rise, the price dips and recovers in a rounded U shape back to around the previous high. That high is the rim.
  2. The handle: a short, shallow pullback or sideways drift near the rim, usually in the upper part of the cup.
  3. The breakout: the price closes above the rim or the top of the handle.

A rounded U is usually preferred over a sharp V, because it suggests a gradual change from selling to buying. The pattern was popularised by investor William O’Neil, and is usually discussed on daily and weekly stock charts, though traders apply it to any market.

Inverted cup and handle

The upside-down version, an arch followed by a small bounce and a break lower, is read as bearish.

Related patterns

The handle often looks like a small flag. A cup without a handle can look like a rounded bottom or a double bottom.

Drawing it on TradingView

Use the Trend Line tool (shortcut Alt + T) for necklines and wedge lines, the Parallel Channel tool for flags, and the Patterns group in the left toolbar, which includes a head and shoulders drawing tool. Practise on past charts with Bar Replay, and see all TradingView shortcuts.

No pattern is a guarantee. Patterns describe how buyers and sellers behaved; they don’t predict the next move on their own, and they fail often. Traders usually wait for confirmation, look at where the pattern forms (after a trend, at support or resistance), and decide their exit before they enter. Size the trade with the position size calculator.

Diagrams are illustrations drawn from example prices. Hollow candles closed higher than they opened; filled candles closed lower. ChartWatch doesn’t give trading advice.

FAQ

Is cup and handle bullish?
Yes. The standard cup and handle is a bullish continuation pattern, confirmed by a breakout above the rim or the handle's high.
How long does a cup and handle take to form?
It varies with the timeframe. On daily stock charts it's usually discussed over weeks to months, but the same shape can appear on any timeframe.
What is an inverted cup and handle?
The bearish mirror image: an arch, a small bounce, then a break below the base.

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