As of 09/25/2023   Indus: 34,007 +43.04 +0.1%     Trans: 15,101 +113.50 +0.8%     Utils: 870 -1.67 -0.2%     Nasdaq: 13,271 +59.51 +0.5%     S&P 500: 4,337 +17.38 +0.4%	YTD  +2.6%    +12.8%   -10.1%    +26.8%    +13.0%	Targets    Overview: 09/15/2023     35,000 or 33,600 by 10/15/2023   15,900 or 14,800 by 10/01/2023   900 or 850 by 10/01/2023   14,400 or 13,000 by 10/01/2023   4,575 or 4,300 by 10/01/2023
Chart Pattern Indicator: on 9/15/23

As of 09/25/2023   Indus: 34,007 +43.04 +0.1%     Trans: 15,101 +113.50 +0.8%     Utils: 870 -1.67 -0.2%     Nasdaq: 13,271 +59.51 +0.5%     S&P 500: 4,337 +17.38 +0.4%	YTD  +2.6%    +12.8%   -10.1%    +26.8%    +13.0%
Targets    Overview: 09/15/2023     35,000 or 33,600 by 10/15/2023   15,900 or 14,800 by 10/01/2023   900 or 850 by 10/01/2023   14,400 or 13,000 by 10/01/2023   4,575 or 4,300 by 10/01/2023
Chart Pattern Indicator: on 9/15/23

Bulkowski on the Cup with Handle

Statistics updated on 8/26/2020.

For more information on this pattern, read Encyclopedia of Chart Patterns Second Edition, pictured on the right, pages 149 to 163. That chapter gives a complete review of the chart pattern, compared to what is described below.

Cup with Handle: Important Bull Market Results

The above numbers are based on 913 perfect trades. See the glossary for definitions.

Cup with Handle: Identification Guidelines

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Cup with Handle: Trading Tips

Consult the associated figure on the right.

Trading Tactic	Explanation	The Measure Rule
Measure rule	Measure the height from the right cup lip (A) to the lowest valley (B) then multiply by the above 'percentage meeting price target.' Add the result to the breakout price (A) to get a target.
Inner cup	Cups often form within cups (points 1 and 2), so trade the inner cup when price rises above the handle (the dashed green line at point 3).
Trendline	If possible, draw a down-sloping trendline along the handle peaks. A close above the trendline signals an early buy. I show this as the blue line extending down from point A on the chart to the right.
Buy	Buy when price closes above the right cup rim (point A, and the top horizontal red line).
Stop	The handle low (point C) is a good place to put a stop. Raise the stop as price rises.
Throwbacks	Throwbacks hurt performance.
Short handle	Stocks with handles shorter than the median 22 days show superior post breakout performance.

Cup with Handle: Example

The figure on the right shows an example of a cup with handle chart pattern. The rise leading to the cup with handle begins at C and reaches the left cup lip at point A. Since this is on the weekly scale, the price chart appears narrower than usual, but price rounds downward forming a cup with the right cup lip at B. The handle lasts a few weeks before price begins moving up. The next week, price rockets upward about seven points.

-- Thomas Bulkowski

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See Also

• Cup with handle, inverted
• The rounding bottom is a similar pattern with fewer requirements.
• Have you thought about an ascending scallop?
• Are you hungry? How about some descending scallops?

 

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