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The formation occurs after a trend change, where a series of rising peaks and troughs is followed by a reversal of the price trend. A downtrend of lower peaks and lower troughs form the left side of the cup, rounds out and later begins a new rising trend so that a cup is formed. The cup is in the shape of a 'U'. The handle is a drop in prices after the right side of the lip of the cup has been reached. The handle can have a variety of shapes and can consist of double handles and high handles. As long as the price does not fall back through the 200 day moving average in forming the handle, the expectation for the pattern is for prices to rise after completion of the handle.

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Category Howto & DIY

Tags cup, handle, chart, pattern, technical, analysis, charting, trading, traders, investment, buy, stocks, shares, stock, market