A rounded base followed by a small pullback handle, then a breakout. Ranked 3rd of 39 bullish patterns by Bulkowski — averaging a 54% rise on 913 trades.
8 min read Pattern Deep-Dives
+54%
Average rise
3 / 39
Bulkowski rank (bullish)
913
Sample
~58%
Throwback rate
// key takeaways
▸ A U-shaped 'cup' base signals a slow transfer from sellers to buyers.
▸ The 'handle' is a small pullback near the cup's rim.
▸ Confirmation is a breakout above the rim (resistance).
▸ Target = cup depth projected up from the breakout.
// figure: cup & handle pattern
figure.svg
Cup & handle — rounded cup, a small handle dip, then breakout.
How it forms
Price sells off and rounds out a gentle, U-shaped bottom (not a sharp V), recovering back to the prior high. It then drifts down slightly to form the handle as the last profit-takers exit. A breakout above the rim, ideally on rising volume, launches the continuation.
The trading playbook
› Entry — on a close above the rim/handle resistance with a volume expansion.
› Stop — below the handle low.
› Target — measure the depth of the cup and project it upward from the breakout.
What makes a good cup
The best cups are rounded and reasonably symmetric — a sharp V-recovery is less reliable. The handle should be shallow (a minor pullback, not a new decline) and form in the upper half of the cup. Deep handles hint the base has failed.
// common mistakes
✕ Trading a V-shaped recovery as a cup — it needs a rounded base.
✕ Accepting a deep handle that erases most of the cup's gains.
✕ Entering inside the handle before the rim breaks.
Frequently asked
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Educational content only — not financial advice. Pattern statistics reference Thomas Bulkowski (thepatternsite.com) and published technical-analysis literature.
