In
technical analysis, a
price trend that resembles a cup and a handle on a
chart. It occurs when the
price of a
security reaches a high and then takes a
U-shaped downtrend and uptrend. This is the cup. When the price approaches its previous high,
investors who
bought at or near the previous high tend to
sell their
shares, which causes the price to drop slightly. This is the handle. After the handle "completes," the price of the security tends to increase significantly. Technical analysts view cups and handles as
buy signals under the correct circumstances.