Cup and Handle

A bullish continuation pattern identified by William O'Neil that resembles a teacup when viewed on a chart. The "cup" forms as the stock declines and gradually rounds back to its previous high, followed by a short downward drift (the "handle") before breaking out to new highs. O'Neil considered the cup and handle one of the most reliable chart patterns and made it a cornerstone of his CAN SLIM investment methodology. The ideal cup is 7 to 65 weeks long with a handle that drifts down no more than 12% from the right side of the cup.