What is a Cup with Handle

English · 2:39 · Published 2026-10-28

Depth, the rounded bottom, a tight handle in the upper half, volume and the pivot.

What the video says

The cup with handle is one of the best known chart patterns in trading. William O'Neil made it famous, after finding it in many of the biggest winners of the last century.

As always, it starts with a stock in an uptrend. Then the stock pulls back and builds a base shaped like a tea cup.

The left side of the cup is the decline. A healthy cup is usually twelve to forty percent deep. Much deeper than that, and the stock is often damaged.

The bottom should be rounded, not a sharp V. A rounded bottom shows that selling dried up slowly, and that weak holders had time to leave.

Then the right side. The price climbs back up, close to the old high on the left. The whole cup should take at least seven weeks.

Near the top, many people who bought at the old high just want their money back, so they sell. That creates the handle: a short, shallow pullback.

A good handle is small. A few days to a few weeks, no deeper than about twelve percent, and in the upper half of the cup.

Volume tells the story. It is high on the way down, it fades at the bottom, and it is usually very light during the handle.

The pivot is the high of the handle. The breakout is a close above it, on strong volume.

The stop usually goes below the low of the handle. A tight handle means a small risk.

Watch out for weak versions. A handle in the lower half of the cup, a handle that drifts upward, or a V-shaped cup with no rest at the bottom. These fail more often.

Here is a cup with handle on a real Market Strength chart.

The rounded cup, the shallow handle near the top, and the breakout above the handle high.

On Market Strength, the Stock Screener has a Cup with handle screen. It shows the cup depth, the handle depth and the pivot for every match.

And in Tools, the Pattern Finder has a cup and handle preset, so you can find the shape across the whole market in one tap.

Find all the concept videos in the Education tab.

Market Strength is an education and research tool, not investment advice.

Read the guide: Cup and handle scanner for NSE stocks

More videos

All video lessons