Cup and handle definition
Cup and handle
The cup and handle is a technical analysis pattern that got its name by resembling a tea cup. It features candlesticks that resemble a shallow, rounded saucer with a downward trending handle extending from the cup’s righthand side. The formation can occur over a timeframe as short as several weeks up to an entire year.
Is the cup and handle pattern bullish?
The cup and handle is considered a bullish pattern. The sloping handle formed during a downward trend after the formation of the cup is considered an indicator for traders to buy long. When this formation occurs, prices are expected to rise higher in response to selling pressure caused by the downward drifting handle.