What is a cup pattern?
The cup and handle pattern is a bullish technical price pattern that appears on a price chart as a cup with a handle, signaling a potential buying opportunity. This pattern typically forms over a period of seven to 65 weeks and is characterized by a U shaped cup followed by a downward sloping handle. The cup and handle pattern is a form of technical analysis indicator that arises when the price chart of an asset resembles a U-shape with a horizontal line that normally drifts downward, similar to a teacup.The pattern forms with a rounded bottom (the cup) followed by a consolidation period (the handle). Set stop-loss orders slightly below the lowest point of the handle to protect against false breakouts. Measure the height of the cup and project it from the breakout point to set realistic profit targets.