The Cup and Handle pattern is a bullish continuation pattern that signals the potential for an upward breakout after a period of consolidation. It forms when the price first declines and then gradually recovers, creating a “cup” shape that resembles a rounded bottom. After this recovery, the price moves sideways or slightly downward in a short consolidation phase, forming the “handle.” This handle usually represents weak selling pressure before buyers regain strength. When the price finally breaks above the resistance line (the rim of the cup), it confirms the pattern and often leads to a strong rally, as it indicates renewed buying momentum and continuation of the prior uptrend.