As of 12/04/2020
  Indus: 30,218 +248.74 +0.8%  
  Trans: 12,742 +155.26 +1.2%  
  Utils: 856 -10.76 -1.2%  
  Nasdaq: 12,464 +87.05 +0.7%  
  S&P 500: 3,699 +32.40 +0.9%  
YTD
 +5.9%  
 +16.9%  
-2.6%  
 +38.9%  
 +14.5%  
  Targets    Overview: 11/30/2020  
  Up arrow30,700 or 28,250 by 12/15/2020
  Up arrow13,500 or 11,700 by 12/15/2020
  Down arrow830 or 925 by 12/15/2020
  Up arrow12,500 or 11,400 by 12/15/2020
  Up arrow3,750 or 3,400 by 12/15/2020
CPI (updated daily): Arrows on 11/2/20
As of 12/04/2020
  Indus: 30,218 +248.74 +0.8%  
  Trans: 12,742 +155.26 +1.2%  
  Utils: 856 -10.76 -1.2%  
  Nasdaq: 12,464 +87.05 +0.7%  
  S&P 500: 3,699 +32.40 +0.9%  
YTD
 +5.9%  
 +16.9%  
-2.6%  
 +38.9%  
 +14.5%  
  Targets    Overview: 11/30/2020  
  Up arrow30,700 or 28,250 by 12/15/2020
  Up arrow13,500 or 11,700 by 12/15/2020
  Down arrow830 or 925 by 12/15/2020
  Up arrow12,500 or 11,400 by 12/15/2020
  Up arrow3,750 or 3,400 by 12/15/2020
CPI (updated daily): Arrows on 11/2/20

Bulkowski on the Cup with Handle

 

Statistics updated on 8/26/2020.

For more information on this pattern, read Encyclopedia of Chart Patterns Second EditionEncyclopedia of Chart Patterns 2nd Edition book., pictured on the right, pages 149 to 163. That chapter gives a complete review of the chart pattern, compared to what is described below.

Important Results
Identification Guidelines
Trading Tips
Example
Other Examples
See Also

A cup with handle chart pattern

Cup-with-Handle

Cup with Handle: Important Bull Market Results

Overall performance rank (1 is best): 3 out of 39
Break even failure rate: 5%
Average rise: 54%
Throwback rate: 62%
Percentage meeting price target: 61%

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

Cup with Handle: Identification Guidelines

CharacteristicDiscussion
Price trendPrice rises into the start of the cup.
ShapeA rounded turn that looks like a cup with a handle on the right.
U-shaped cupThe cup should be U-shaped, not V-shaped.
HandleThe cup must have a handle on the right.
Cup durationFrom 7 to 65 weeks
Handle1 week minimum with no maximum, forming in the upper half of the cup.
CupCup rims should be near the same price level but be flexible.

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Cup with Handle: Trading Tips

Consult the associated figure on the right.

Trading TacticExplanation Cup with handle measure rule
The Measure Rule
Measure ruleMeasure 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 cupCups 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).
TrendlineIf 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.
BuyBuy when price closes above the right cup rim (point A, and the top horizontal red line).
StopThe handle low (point C) is a good place to put a stop. Raise the stop as price rises.
ThrowbacksThrowbacks hurt performance.
Short handleStocks with handles shorter than the median 22 days show superior post breakout performance.

 

Adam & Adam double top chart pattern example

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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Cup with Handle: Other Examples

See Also

 

Support this site! Clicking any of the books (below) takes you to Amazon.com. If you buy ANYTHING while there, they pay for the referral.

My novels:  Bumper's Story Head's Law

Chart Patterns: After the Buy Getting Started in Chart Patterns, Second Edition Trading Basics Fundamental Analysis and Position Trading Swing and Day Trading Visual Guide to Chart Patterns Encyclopedia of Candlestick Charts Encyclopedia of Chart Patterns 2nd Edition Trading Classic Chart Patterns

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