Cup And Handle

Cup and Handle Pattern

Bullish continuation pattern indicating accumulation before a breakout.

Pattern Structure

The Cup

• Price rounds down from resistance, forms a "U" shaped bottom (not "V"), rises back to resistance
• Duration: 7-65 weeks (classic), or scaled for crypto/lower timeframes

The Handle

• Small pullback from resistance into a declining flag/pennant
• Should retrace 10-15% of cup depth (up to 33% acceptable)
• Must stay in upper half of cup

| Factor | Ideal | Acceptable | |--------|-------|------------| | Cup shape | Rounded "U" | Slightly V-shaped | | Handle depth | 10-15% of cup | Up to 33% | | Volume | Decreasing in handle | Stable |

Workflow

1. Get Exact Data

get_candles_around_date(symbol=, exchange=, interval=, date=)

2. Mark Key Structure

Cup lip (resistance level where both sides of the cup meet):

draw_chart_analysis(action="create", drawing={
    "type": "resistance",
    "points": [
        {"time": , "price": },
        {"time": , "price": }
    ],
    "options": {"text": "Lip"}
})

Cup bottom:

draw_chart_analysis(action="create", drawing={
    "type": "highlight",
    "points": [{"time": , "price": }],
    "options": {"text": "Cup Low"}
})

Handle boundaries (2 converging or parallel trend lines):

draw_chart_analysis(action="create", drawing={
    "type": "trend",
    "points": [
        {"time": , "price": },
        {"time": , "price": }
    ],
    "options": {"text": "Handle R"}
})

draw_chart_analysis(action="create", drawing={
    "type": "trend",
    "points": [
        {"time": , "price": },
        {"time": , "price": }
    ],
    "options": {"text": "Handle S"}
})

3. Enter

Standard: Enter on break above cup lip with volume spike. Stop below handle low. Aggressive: Enter as handle finds support. Tighter stop, higher risk. Conservative: Wait for breakout + retest of lip (now support). Target: Breakout level + cup depth (lip to bottom distance).

Key Rules

• NEVER enter before the handle forms — cup alone is incomplete
• NEVER trust a handle that drops below 50% of cup depth — invalidates pattern
• Volume must decline in handle and spike on breakout
• Failure at lip on second attempt = potential double top, not cup and handle

Related Skills

• flag-pennant — The handle is essentially a small flag
• double-top-bottom — Failed cup breakouts can become double tops

Source & license

This open-source skill is cataloged on AgentStack and links to its original source — we do not rehost the code.

• Author: SKE-Labs
• Source: SKE-Labs/agent-trading-skills
• License: Apache-2.0

Install and usage instructions live in the source repository linked above.