Cup and Handle / カップ・アンド・ハンドル
Reference values based on Bulkowski's "Encyclopedia of Chart Patterns". Data is primarily from U.S. markets and may differ for other markets.
A bullish continuation pattern consisting of a rounded bottom resembling a teacup (cup) followed by a small downward drift (handle). Popularized by William O'Neil, this pattern frequently appears before significant rallies in growth stocks. Ideally, the cup depth represents a 12-35% correction from the prior high.
Enter long when price breaks above the handle's resistance (near the cup rim) on a closing basis. Confirm that volume at breakout is at least 1.5 times the average.
Project the cup's depth (from the rim to the bottom) upward from the breakout point. For example: if the rim is at 1100 and the bottom is at 950, add 150 for a target of 1250.
Place a stop-loss slightly below the handle's bottom. Alternatively, set it 5-8% below the breakout point.
Volume decreases along the left side of the cup and reaches its lowest at the bottom. It gradually increases along the right side, decreases again during the handle, and surges at breakout. This is the ideal volume pattern.