CUP AND HANDLE The cup and handle pattern is a bullish continuation pattern that signifies a period of consolidation followed by a breakout to the upside. Here's a detailed breakdown:
Cup: This part of the pattern looks like a rounded bottom, similar to the shape of a "U." It represents a period where the price declines and then gradually rises back to the level from which it initially fell.
Handle: After the cup formation, the price typically moves sideways or slightly downward, forming a small consolidation phase that looks like a flag or a pennant. This is the handle of the pattern.
Breakout: The pattern is confirmed when the price breaks out above the resistance level formed by the rim of the cup. This breakout suggests the continuation of the upward trend.
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