Patterns › Continuation
Cup and Handle pattern
A cup and handle is a continuation pattern in which price forms a rounded, U-shaped base (the cup) followed by a shorter, shallower pullback (the handle), often preceding a breakout above the cup's prior resistance.
Stocks forming it now ↓
What does a cup and handle look like?
Our scanner checks it as a setup where all of these hold:
- A left lip at the stock's highest point of the past year (about 250 trading days).
- A cup 25 to 245 trading days long and 5% to 50% deep.
- The right side of the cup has regained at least 35% of the cup's depth.
- A handle of 10 to 45 trading days that gives back no more than 35% of the cup's depth.
- A close at least 1% above the rim, the highest close on the right side of the cup. Unlike most of our patterns, this one signals after that breakout, not before it.
- Price hasn't yet climbed above the left lip. The breakout is over the right side of the cup, not over the old high.
- A prior uptrend and volume aren't checked.
How reliable is the cup and handle pattern?
In our most recent backtest (March – September 2026, out-of-sample), 54.7% of the 614 highest-scoring cup and handle setups, out of 6,234 studied, were trading higher two weeks later.
How are entry, stop and target set?
Every pick comes with an entry zone, price targets and a stop. The targets come from how far past cup and handle setups actually moved, not from a textbook projection of the pattern's height. The stop scales with the stock's own average daily range, so a volatile stock gets a wider stop than a quiet one.
How is it different from a rounding bottom?
Both include a rounded base, but a cup and handle adds a short pullback (the handle) near the old high before breaking out, while a rounding bottom breaks out directly from the curve.
Stocks forming a cup and handle now
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