Cup and Handle
Definition
A bullish continuation pattern resembling a cup with a handle, typically producing 20-30% gains.
Detailed Explanation
The cup and handle is a bullish continuation pattern that forms during an uptrend. The 'cup' is a rounded bottom taking 4-12 weeks to form, with depth of 15-35% from the prior peak. The 'handle' is a brief downward drift after the cup completes, representing final seller exhaustion. The pattern completes when price breaks above the handle high with strong volume. Research shows a 65% success rate with average gains of 20-30%.
Example
NVDA rises to $500, forms a cup down to $400 over 8 weeks, creates a handle drifting to $480, then breaks out above $500. Target: $600.