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Cup and handle

A rounded base followed by a small pullback, then a possible breakout above the prior high.

Chart PatternsIntermediate

Definition

The cup is a gradual U-shaped recovery that suggests sellers are being absorbed. The handle is a shallow dip on lighter volume. A break above the handle's resistance on expanding volume completes the pattern.

Watch out for

The cup should be rounded, not a sharp V. Patterns that are too deep or too fast fail more often.

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