The cup and handle is a medium-to-long-term base pattern: price forms a U-shaped cup (gradual decline then gradual recovery), then a slight pullback forms the handle, before breaking out above the cup's rim on volume.
Institutional accumulation in progress. The cup shows gradual consolidation and distribution digestion; the handle is a final shakeout of short-term traders; the breakout is the markup phase as retail buying drives the trend.
Enter when price breaks above the cup's rim on volume (win rate 65%). Stop-loss below the handle's low. Target = cup depth added to breakout point, often 20%+.
Rounder U-shaped cups are more reliable than V-shaped bottoms. Formation typically takes weeks to months — the longer the better.