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Bulkowski's Cup with Handle

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As of 06/25/2019
  Industrials: 26,548 -179.32 -0.7%  
  Transports: 10,110 -87.48 -0.9%  
  Utilities: 821 -5.99 -0.7%  
  Nasdaq: 7,885 -120.98 -1.5%  
  S&P 500: 2,917 -27.97 -0.9%  
YTD
 +13.8%  
 +10.2%  
 +15.2%  
 +18.8%  
 +16.4%  
  Tom's Targets    Overview: 06/13/2019  
  Up arrow26,800 or 25,400 by 07/01/2019
  Up arrow10,700 or 9,900 by 07/01/2019
  Up arrow830 or 780 by 07/01/2019
  Up arrow8,150 or 7,575 by 07/01/2019
  Up arrow3,000 or 2,875 by 07/01/2019
As of 06/25/2019
  Industrials: 26,548 -179.32 -0.7%  
  Transports: 10,110 -87.48 -0.9%  
  Utilities: 821 -5.99 -0.7%  
  Nasdaq: 7,885 -120.98 -1.5%  
  S&P 500: 2,917 -27.97 -0.9%  
YTD
 +13.8%  
 +10.2%  
 +15.2%  
 +18.8%  
 +16.4%  
  Tom's Targets    Overview: 06/13/2019  
  Up arrow26,800 or 25,400 by 07/01/2019
  Up arrow10,700 or 9,900 by 07/01/2019
  Up arrow830 or 780 by 07/01/2019
  Up arrow8,150 or 7,575 by 07/01/2019
  Up arrow3,000 or 2,875 by 07/01/2019

Written by and copyright © 2005-2019 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. Some pattern names are the registered trademarks of their respective owners.

Statistics updated on 8/17/18

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.

A cup with handle chart pattern

Cup-with-Handle

Important Bull Market Results for Cup with Handle

Overall performance rank (1 is best): not ranked
Break even failure rate: 5%
Average rise: 52%
Throwback rate: 62%
Percentage meeting price target: 62%

The above numbers are based on 912 perfect trades. See the glossary for definitions.

Cup with Handle Identification Guidelines

CharacteristicDiscussion
Price trendUpward leading to the pattern. I use a 6-month look back (high to high). If price is higher at pattern start than 6 months ago, then I accept it. Otherwise, I visually check to see it's in a short-term uptrend. I no longer require a 30% upward move.
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
Handle duration1 week minimum with no maximum.
HandleForms in upper half of 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
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.
Cup with handle measure rule
The Measure Rule
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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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Other Cup with Handle Examples

See Also

Written by and copyright © 2005-2019 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. Some pattern names are the registered trademarks of their respective owners. Your dreams have been answered. I'm here.