Trend / Momentum
Cup and Handle Breakout
A cup and handle is a rounded pullback and recovery, the cup, followed by a shallow second pullback, the handle, and the trade is buying the breakout above the rim once the handle holds.
Trace the pattern, then score it
Pick a setup below, then click three points on the chart in order: the left rim high, the cup low, and the right rim high. The tool auto-detects the handle, the shallow pullback right after the right rim, and scores the whole pattern against a real rubric built from cup depth, rim symmetry, and how shallow the handle actually is.
Click 1: the left rim high
How it works
- Cup depth is worth 30 points. A healthy cup runs 12% to 33% deep, measured from the average of the two rims down to the cup low. Shallower cups barely count as a pattern, deeper cups look more like a full trend reversal than a pause.
- Rim symmetry is worth 25 points. The two rims should sit close to the same price. The wider that gap, the fuzzier the actual resistance level is, since there is no single clean price where sellers have shown up twice.
- The handle is worth 35 points, the biggest single piece. A shallow pullback of roughly a third of the cup's depth or less scores well. A handle that undercuts the cup's own low scores zero, since at that point the second pullback isn't a handle anymore, it's a failed pattern.
- Breakout volume is worth the remaining 10 points. Higher volume on the move back above the rim adds confirmation on top of the shape itself.
Where this breaks
Handles that are too deep or fail to hold
The handle is the part of this pattern that fails most often, and the rubric above is built to catch it. Score the deep-handle preset and watch the handle component collapse toward zero once that second pullback goes anywhere near the cup's own low. That is not a minor deduction, it is the pattern telling you the setup has stopped being a shallow pause and started looking like the stock giving back the whole recovery. A handle that keeps digging past that point often keeps going, past the cup low and into a fresh downtrend, instead of turning around to break out. The lopsided-rims preset shows the other failure mode: even with a shallow handle, resistance that isn't at one clean price makes the breakout level itself a guess, and the measured-move target inherits that same uncertainty.