Cup With Handle

The cup with handle pattern is probably one of the most recognized and familiar chart patterns out there. It is a formation that comes from its name, and should be a long rounded pattern, as V shaped patterns are a bit more failure prone. The depth of the cup should be no more than 50% top to bottom. The handle on the cup base resembles a bull flag or pennant, as it will tilt downward and form well into the upper half of the cup. Generally speaking one wants to witness a slowing of volume within the handle, as sellers become reluctant to part with their shares. The breakout occurs with a move above the handle, as always preferably on stronger than normal daily volume.