Cup and Handle

A Cup and Handle is a chart pattern where a stock's price dips down and recovers (forming a U-shape like a cup), then pulls back slightly (the handle) before potentially rising again. You'll see this pattern discussed by technical analysts—people who study price charts to predict future moves—because it's considered a bullish signal, meaning traders believe the stock might go up. The idea is that the dip shakes out nervous investors, and the handle represents a brief pause before the next leg up. For example, if TechCorp stock dropped 20%, climbed back, then dipped 5% before surging higher, that could be a cup and handle. It's not a guarantee, just a pattern some traders watch for.