Cup and Handle Patterns - Let's find them all!

You ask: “What is a Cup and Handle Pattern?”

Good question.

The cup and handle is both a continuation and a reversal pattern.

Continuation pattern:

  • Occurs during an uptrend; a cup and handle forms, then the price continues its rise.

Reversal pattern:

  • Marks the end of a downtrend, and shows the price transitioning into an uptrend.

Key pattern characteristics

  1. Trend: Prior trend before the formation of a cup and handle pattern must be bullish.

  2. Cup shape: The cup formation should be “U- shaped” and not “V-shaped” and is usually a decrease of 20% to 40% from the left-corner’s peak to the bottom of the cup. In cryptocurrency this decrease can be much larger (possibly up to a 70% decrease).

  3. Cup depth: Cup should retrace at least 25% of cup depth but may not be more than 50% of cup depth.

  4. Handle: Handle resembles a flag formation in a pullback fashion. Breadth (width) of a handle is usually small, and it can be 25% to 40% of a cup’s width.

  5. Volume: Volume diminishes during the first half of the cup and increases during the right side rise of the cup. The handle also exhibits a similar volume behavior. Volume should see a significant surge during breakout above the rim level.

  6. Duration: Cup and handle patterns must have extended breadth (two to 12 weeks) to be a valid pattern *this may not apply to cryptocurrency (see “Cup & Handle,” below).

The cup and handle is similar to a Rounding Bottom except that with the cup and handle the price stalls near the breakout point and moves sideways or lower for a period of time. The U-shaped price action forms the cup, and the sideways or downside movement that follows creates the handle (see below).

Source: Investopedia


Question for advanced traders:
Is this :illuminati: XLM :illuminati: chart showing a Cup & Handle pattern? (Answer below)

  • Yes, it is a Cup & Handle
  • No, it is a Roundbottom
  • Neither
  • I’m new and clueless
  • Your Mom
  • :doge:

0 voters

Why or why not?

To me, it looks very similar to this :icx: (Icon) chart:


:icx::illuminati::icx::illuminati: :icx::illuminati: :icx::illuminati: :icx::illuminati: :icx::illuminati: :icx::illuminati: :icx::illuminati: :icx::illuminati: :icx::illuminati: :icx::illuminati: :icx::illuminati::icx::illuminati::icx::illuminati:

  • This is a Cup & Handle
  • This is not a Cup & Handle
  • BCash is the Real Bitcoin
  • Roger Ver is Gay

0 voters

Of course, I think the :icx: ICX :icx: chart is prettier.
Plus, I’m extremely biased as I am holding lots o’ that 'ish.
:image:

:arrow_up:
Can we get this as an emoji please? @john @peter

2 Likes

I’d better do my DCA before lift off then. :rocket:

2 Likes

It’s solid as a cup and handle pattern. This is a snapshot from my trading notes yesterday. Looks like XLM has gone up about 4% since I produced this:

2 Likes

I forgot to post a link on some background about cups and handles that helped me with this pattern:

4 Likes

What do you all think?

1 Like

Thank’s for the knowledge injection, certainly helped understand things that much better. your input is appreciated.
Cheers :+1::sunglasses:

2 Likes

Great idea! Can you include a small definition or something for those who don’t know?

2 Likes

Rounding Bottom

A rounding bottoms look similar to the cup and handle pattern, but does not experience the temporary downward trend of the “handle” portion. The initial declining slope of a rounding bottom indicates an excess of supply, which forces the stock price down. The transfer to an upward trend occurs when buyers enter the market at a low price, which increases demand for the stock. Once the rounding bottom is complete, the stock breaks out and will continue in its new upward trend.

1 Like

💰 YEN · YouTube ·️ YEN.CAMP 🧠