Inverted Cup & Handlepattern.
The bearish counterpart of the Cup & Handle: a rounded top above horizontal support, followed by a shallow pause near the lows. The book describes it as controlled distribution, most effective within an established downtrend.
- Flat support, rounded top, shallow handle.
- Best within an established downtrend.
- Handle stays in the lower part of the structure.
- Stop reference is the handle high.
Idealised outline. The dashed yellow line is the support or resistance the book asks you to draw before naming the pattern.
How the book reads it
- 01
Structure — how to draw it
Mark the flat support first. Above it, price rises gently, forms a rounded top and declines back toward support (the inverted cup), then pauses in a shallow consolidation in the lower part of the structure (the handle).
- 02
Psychology — who is in control
Demand weakens gradually and supply grows in a controlled way. In the handle, weak buyers exit and a final push higher fails, suggesting that buying pressure is largely exhausted while sellers stay patient.
- 03
Confirmation
The book requires a decisive close below the horizontal support, ideally a strong bearish candle with expanding volume. A failed retest of the broken support from below reinforces the reading.
- 04
Risk — where the idea is wrong
The book places the stop just above the highest point of the handle; a decisive rise back into the handle signals failure. The height of the inverted cup projected from the breakdown is the measured-move reference.
- 05
Common trap
Expecting a fast breakdown and losing interest during the slow phase is common. The book notes reduced reliability when the shape forms during a strong bullish phase.
On real charts
Annotated by Mr. Chartist for the book: the structure, the breakout, the pattern's height and the level that proves the idea wrong. Historical charts for education — not a view on any stock today.
More curved patterns
Gradual structures where control transfers over many candles before a decisive move develops.
From the book · Curved support & resistance
The full Inverted Cup & Handle chapter — in the book.
Development stages, volume behaviour, breakout quality, traps and more annotated case studies.
