Investors use this model when they want to measure the credibility of an uptrend or “bullish” in the market.
Due to the buying and selling of investors, the uptrend gradually decreases and then returns to the first state. The shape of the uptrend is like the letter U. Once the “cup” pattern (cup-like) is formed, the chart is reconsidered and the slope is quickly pulled down, which is significantly smaller than the previous cup pattern. The newly formed pattern is called a “handle”, which resembles a cup handle. The cup and handle pattern is considered a continuity pattern, ie when the handle is formed, the uptrend continues.
See the graphic section for more information on other business charts with pictures.