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June 14, 2026
The Dispatch

Definition

Cup and Handle

Cup and handle is a bullish continuation pattern shaped like a rounded bottom (cup) followed by a small pullback (handle).

Price forms a gentle U-shaped recovery (the cup) after a decline, then makes a shallow, brief pullback (the handle) before breaking out above the cup's rim. The breakout signals a resumption of the uptrend, with a target roughly equal to the cup's depth added to the breakout point.

Indian swing and positional traders look for cup and handle setups on stocks and indices, treating the handle breakout on rising volume as the entry trigger. It typically plays out over weeks or months, making it more relevant to delivery and positional trades than to weekly expiry F&O.

Related terms

  • Flag PatternA flag is a short continuation pattern where price consolidates in a small channel after a sharp move, before resuming it.
  • BreakoutA breakout is when price moves decisively beyond a defined support, resistance, or pattern boundary, often starting a new move.
  • TrendlineA trendline is a straight line connecting a series of highs or lows to visualise the direction and slope of a trend.

Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.