This is another one of those “Looks a bit like what it means” terms. In this case, the price in shares dips in a gradual U shape and then picks up, followed by a slight drop marking the handle of the cup, and then a further climb. The peak between the cup and the handle occurs when the stock approaches the peak price on the initial side of the cup. Investors aren’t keen to test the stock price beyond that value, so the price holds steady (we say it “trades sideways”) with a slight downward trend – the handle of the cup.
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