☕ Inverse Cup and Handle Pattern – Bearish Continuation Signal

The Inverse Cup and Handle Pattern is the bearish counterpart of the cup and handle. It signals a potential downward breakout after a period of consolidation.

📘 What Is the Inverse Cup and Handle Pattern?

The Inverse Cup and Handle Pattern forms after a downtrend. - The cup is an inverted rounded top, showing gradual consolidation. - The handle is a short upward pullback after the cup. The breakout below the handle confirms continuation of the bearish trend.

• Occurs after a clear downtrend.
• The cup forms an inverted rounded top resembling an upside-down "U".
• The handle is a small upward pullback or consolidation.
• Breakout below the handle confirms bearish continuation.
• Volume decreases during consolidation and rises during the breakout.
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💡 Market Psychology

- Inverse Cup Formation: Price consolidates gradually; buyers temporarily gain control, but sellers remain dominant. - Handle Formation: Short upward pullback; market pauses before continuation downward. - Breakout: Sellers dominate, leading to continuation of the bearish trend.

✅ Pro Tip: Wait for a breakout below the handle with increased volume to confirm bearish continuation.

⚙️ How to Trade Inverse Cup and Handle Patterns

1. Identify the inverted cup formation after a downtrend with a rounded top.
2. Observe the handle consolidation (small upward pullback).
3. Enter a sell (short) position after breakout below the handle.
4. Place a stop-loss above the top of the handle.
5. Set a target equal to the depth of the cup projected downward from breakout point.

🏁 Conclusion

The Inverse Cup and Handle Pattern is a reliable bearish continuation pattern. Correct identification and breakout confirmation with volume help traders capitalize on downward trends.

“The inverse cup collects weakness, the handle pauses, and the breakout rewards patient bears.”