The Cup and Handle pattern is a bullish continuation pattern that forms after a period of consolidation in an uptrend. It looks like a “U” shaped cup followed by a small downward consolidation called the handle. The cup forms when a stock declines gradually and then recovers back to the previous resistance level, showing accumulation by buyers. After reaching the resistance, the price usually moves sideways or slightly downward forming the handle, which represents a short-term consolidation before the next move. When the stock breaks out above the handle’s resistance with strong volume, it often signals the continuation of the uptrend and potential for further price rise.