As of 08/01/2025
Indus: 43,589 -542.40 -1.2%
Trans: 15,104 -342.04 -2.2%
Utils: 1,108 +6.87 +0.6%
Nasdaq: 20,650 -472.32 -2.2%
S&P 500: 6,238 -101.38 -1.6%
|
YTD
+2.5%
-5.0%
+12.7%
+6.9%
+6.1%
|
 45,300 or 43,200 by 08/15/202516,300 or 14,800 by 08/15/20251,150 or 1,050 by 08/15/202521,700 or 20,500 by 08/15/20256,500 or 6,200 by 08/15/2025 |
As of 08/01/2025
Indus: 43,589 -542.40 -1.2%
Trans: 15,104 -342.04 -2.2%
Utils: 1,108 +6.87 +0.6%
Nasdaq: 20,650 -472.32 -2.2%
S&P 500: 6,238 -101.38 -1.6%
|
YTD
+2.5%
-5.0%
+12.7%
+6.9%
+6.1%
| |
|
45,300 or 43,200 by 08/15/202516,300 or 14,800 by 08/15/20251,150 or 1,050 by 08/15/202521,700 or 20,500 by 08/15/20256,500 or 6,200 by 08/15/2025 | ||
Updated and added 10 examples on 7/28/25.
For more information on this pattern, read Encyclopedia of Chart Patterns, 3rd Edition. The book gives a complete review of the chart pattern, including tour, identification guidelines, focus on failures, performance statistics, trading tactics, and sample trade. Below is just a sliver of the information contained in the book.
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$ $ $
Inverted Cup with Handle Chart Pattern
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The above numbers are based on 556 perfect trades in a bull market. See the glossary for definitions.
| Characteristic | Discussion |
| Rounded turn | Look for a smooth, rounded looking turn (an inverted cup), but allow exceptions. |
| Cup rims | The two cup rims should bottom near the same price. |
| Cup handle | To the right of the cup should be a handle. |
| Cup retrace | Handle must not rise above the cup top but often retrace 30% to 60% up the height of the cup. |
| Confirmation | The pattern confirms as valid when price closes below the right cup lip. |
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| Trading Tactic | Explanation |  The Measure Rule
Trendline
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| Measure rule | Compute the handle height (the distance between the two red lines in the Measure Rule figure to the right). Subtract the result from the price of the right rim low. The result is the price target. | |
| Head-and-shoulders top | If another handle forms to the left of the cup, you might have a head-and-shoulders top chart pattern with a fat head, the shoulders being the cup handles. | |
| Short | When price closes below the right rim low, short the stock. | |
| Trendline | Draw a trendline down (if possible) from the handle tops and extend it into the future. When price closes above this trendline, cover your short. I show this in the Trendline figure to the right as price crossing the red line. | |
| Measured move down | The handle may be the corrective phase of a measured move down chart pattern. Use the MMD measure rule to compute a price target. | |
| Yearly low | Performs best when the breakout is near the yearly low. | |
| Even rims | When the cup rims bottom at the same price, the chart pattern tends to perform better than do those with uneven rims. The Trendline figure shows this as the even lows at A and B. | |
| Pullbacks | Pullbacks hurt post breakout performance. |
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The above figure shows an example of an inverted cup with handle chart pattern (in red). Price makes a gentle rounding turn, forming the inverted cup. Following the cup is the handle, a flat region in this example that stretches from March and into April. Price jumps upward for several weeks and creates another inverted cup (in green) before starting a new trend downward.
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The following is a slide show. Click the right or left arrows, or the circles below the chart to navigate around the slides.
This is a good example of an inverted cup with handle on the daily scale. The two-hump pattern leads to a large decline.
Clearly, this inverted cup isn't as rounded (A) as I like to see. Nor is the drop to B large.
I show this inverted cup on the weekly scale to fit it in the frame. The cup is a nicely rounded shape with a short handle.
An inverted cup with handle.
Another inverted cup, weekly scale. The drop takes price down to A. It might not look like much, but the drop (eyeballing it, from 23 to 15) is 35%.
This inverted cup has a long handle (A).
Weekly scale, an inverted cup with handle. Notice the price scale. Huge drop from 67 to 1. Ouch.
An inverted cup with handle.
An inverted cup with handle on the weekly scale.
An inverted cup with handle.
-- Thomas Bulkowski
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