A cup-and-handle is a reversal pattern formed when a market makes a rounded U-shape bottom (the “cup”), begins to rally, pulls back (the “handle”), and resumes the uptrend. The “cup” can last up to 6 months, and the handle can last for many weeks.
Below is an example of a cup-and-handle pattern:
Above the stock sells off, consolidates, rallies, and then pulls back.
See also Running Cup-and-Handle.
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