As of 11/20/2024   Indus: 43,408 +139.53 +0.3%     Trans: 17,002 -26.31 -0.2%     Utils: 1,055 +1.25 +0.1%     Nasdaq: 18,966 -21.33 -0.1%     S&P 500: 5,917 +0.13 +0.0%	YTD  +15.2%    +6.9%    +19.7%    +26.3%    +24.1%	Targets    Overview: 11/12/2024     46,000 or 43,000 by 12/01/2024   18,000 or 16,600 by 12/01/2024   1,075 or 1,000 by 12/01/2024   20,000 or 18,400 by 12/01/2024   6,100 or 5,800 by 12/01/2024
Chart Pattern Indicator: on 11/18/24

As of 11/20/2024   Indus: 43,408 +139.53 +0.3%     Trans: 17,002 -26.31 -0.2%     Utils: 1,055 +1.25 +0.1%     Nasdaq: 18,966 -21.33 -0.1%     S&P 500: 5,917 +0.13 +0.0%	YTD  +15.2%    +6.9%    +19.7%    +26.3%    +24.1%
Targets    Overview: 11/12/2024     46,000 or 43,000 by 12/01/2024   18,000 or 16,600 by 12/01/2024   1,075 or 1,000 by 12/01/2024   20,000 or 18,400 by 12/01/2024   6,100 or 5,800 by 12/01/2024
Chart Pattern Indicator: on 11/18/24

Bulkowski on the Inverted Cup with Handle

Statistics updated on 8/26/2020.

For more information on this pattern, read Encyclopedia of Chart Patterns Second Edition, pictured on the right, pages 164 to 178. That chapter 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.

If you click on the above link and then buy the book (or anything) while at Amazon.com, the referral will help support this site. Thanks.

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Important Results Identification Guidelines Trading Tips Example See Also

Inverted Cup with Handle Chart Pattern

Inverted Cup with Handle: Important Bull Market Results

The above numbers are based on 556 perfect trades in a bull market. See the glossary for definitions.

Inverted Cup with Handle: Identification Guidelines

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Inverted Cup with Handle: Trading Tips

Trading Tactic	Explanation	The Measure Rule Trendline
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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Inverted Cup with Handle: Example

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.

-- Thomas Bulkowski

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See Also

• Cup with handle
• Inverted and descending scallops look the same as inverted cups.
• Stocks that double. Discover what attributes they share.
• 1-2-3 trend change. How do you know when the price trend is changing?
• Fibonacci retraces and extensions, in price and time.
• Setting price targets using Fibonacci.
• Price mirrors. How can they be used for price prediction?
• Predicting the breakout direction: With some patterns, it's easy.

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