✨The cup and handle pattern is a popular bullish continuation pattern seen on charts in the stock, forex, or crypto markets. The shape resembles a teacup.
✨A “cup” on a chart is formed when the price slowly falls and then returns to its previous level in a circular pattern. This indicates a consolidation in the market where sellers are leaving and buyers are starting to come back in.
✨A “handle” is followed by a small pullback after the cup is formed, which takes the price slightly down or sideways for a while. This handle is usually in the shape of a flag or pennant. As soon as the price breaks the resistance above the handle, the market breaks out to the upside.
✨Traders use this pattern as a buy signal, and the entry point is usually placed above the resistance of the handle, while the stop loss is placed below the handle.
