The cup and handle is a bullish continuation chart pattern that signals a potential upside breakout after consolidation; it forms when price creates a rounded “U-shaped” cup showing gradual recovery from selling pressure, followed by a short pullback or sideways move called the handle, which reflects minor profit-booking and weak hands exiting. When price breaks out above the handle’s resistance with good volume, it confirms renewed buying interest and often leads to a strong upward move, with the depth of the cup commonly used to estimate the target.