Mastering the Cup and Handle Pattern: A Complete Guide

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What is a Cup and Handle Pattern? Unlike most chart patterns, the cup and handle can represent a continuation or a reversal in the market. It’s more versatile than other chart patterns that suggest a reversal or continuation, but not both. The cup resembles a rounded bottom, while the handle forms a slight downward consolidation. The consolidation is similar to a descending channel or bullish flag pattern. Cup: The rounded bottom, typically spanning several weeks or months. Handle: A slight downward consolidation that looks like a bull flag and should be relatively small compared to the cup. Neckline: The trend line connecting the two swing highs within the pattern.