As of 03/18/2024
  Indus: 38,790 +75.66 +0.2%  
  Trans: 15,418 -81.05 -0.5%  
  Utils: 853 +3.06 +0.4%  
  Nasdaq: 16,103 +130.28 +0.8%  
  S&P 500: 5,149 +32.33 +0.6%  
YTD
 +2.9%  
-3.0%  
-3.2%  
 +7.3%  
 +8.0%  
  Targets    Overview: 03/13/2024  
  Down arrow38,000 or 39,350 by 04/01/2024
  Up arrow16,300 or 15,350 by 04/01/2024
  Up arrow885 or 830 by 04/01/2024
  Down arrow15,200 or 16,600 by 04/01/2024
  Up arrow5,250 or 5,000 by 04/01/2024
As of 03/18/2024
  Indus: 38,790 +75.66 +0.2%  
  Trans: 15,418 -81.05 -0.5%  
  Utils: 853 +3.06 +0.4%  
  Nasdaq: 16,103 +130.28 +0.8%  
  S&P 500: 5,149 +32.33 +0.6%  
YTD
 +2.9%  
-3.0%  
-3.2%  
 +7.3%  
 +8.0%  
  Targets    Overview: 03/13/2024  
  Down arrow38,000 or 39,350 by 04/01/2024
  Up arrow16,300 or 15,350 by 04/01/2024
  Up arrow885 or 830 by 04/01/2024
  Down arrow15,200 or 16,600 by 04/01/2024
  Up arrow5,250 or 5,000 by 04/01/2024

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
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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See Also

 

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