The cup is a shape you have already met
07.02.04 drew it: an illustrative share whose weekly closes fall from ₹120 in shrinking steps to ₹100, sit flat for a time, and rise back in shrinking steps to ₹118. Read together those weeks make a broad U, and that page said plainly that real prices wobble and no semicircle is required.
Nothing about the cup is new here, so nothing about it is re-taught. What this page adds is the handle: a small pullback near the right rim, before any attempt on ₹120. On this history it is ₹116, ₹113, ₹112, ₹114 — four weeks, giving back ₹6 of the ₹18 recovered.
The two-part reading is the usual one. The cup is a long repair; the handle is a last shake before the old high is tested. It is a good story and this page will come back to how much of it is on the chart.
The cup from 07.02.04, and four weeks more
The dashed line is the ₹120 left rim — the test fixed for that exercise. The fainter line marks the handle's low.
The cup is the first fourteen points and is 07.02.04's history unchanged. Only the last four are new.
Define “rounded”
This is the question the pattern cannot answer, and it is not pedantry, because rounded is doing the whole job of distinguishing a cup from anything else.
A V-shaped recovery has the same left rim, the same low and the same right rim. It is explicitly not a cup, and the stated reason is that the turn was too abrupt — the repair did not take long enough for the sellers to be finished with. That is a real idea. It is also not a measurement, and there is no published curvature test, no minimum number of weeks at the low, and no agreed way to tell a shallow U from a wide V.
So the defining feature is assessed by eye. 07.01.04 said the deep problem with chart-pattern statistics is that identification depends on a person rather than a threshold, and the cup is the purest example in Part 07: two careful readers can disagree about whether an instance exists at all, not merely about where its lines go.
Every other pattern in this chapter can at least be argued about in numbers. This one is argued about in adjectives.
The one formulation that did supply numbers
It would be unfair to leave it there, because one well-known version does commit to specifics. William O'Neil's formulation, from the CAN SLIM method, states them: the cup should take at least seven weeks, its depth should sit within a stated band rather than being unlimited, the handle should drift downward rather than sideways, should occupy the upper portion of the cup, and should be short relative to it.
That is more than most writers offer and it deserves credit. It also makes the pattern checkable in a way the bare description is not — given his rules, two readers applying them carefully will agree far more often.
What the numbers are not is measured. They are one experienced practitioner's stipulations, and 07.01.04's standard applies unchanged: a threshold somebody chose is a threshold somebody chose, however specific, and adopting it decides how many cups exist in a chart rather than discovering how many were there. Seven weeks rather than five is the same kind of dial as 2% rather than 5% on a double top's tolerance.
So the honest position is the one this Part has taken throughout. Use his rules if you find them useful; write down which version you are using; and do not mistake the precision of a rule for evidence about the thing it selects.
| Feature | On the chart? | Who decided |
|---|---|---|
| Left rim ₹120 | Yes — a completed weekly close | Nobody. It is a price |
| Low ₹100, right rim ₹118 | Yes — completed closes | Nobody |
| That the base is rounded | By eye only | The reader |
| That four weeks is a handle | By convention | The reader, or O’Neil |
| That this is a continuation | Not yet | A week that has not happened |
What the chapter turned out to be about
Five pages, five shapes, and the same finding each time. A flag is a pause that earns its name when the move resumes. A symmetrical triangle is classified by which side it leaves. A rectangle is a range with two names waiting for it. A wedge is whichever of three patterns your choice of touches produces. A cup is a recovery somebody judged to be round enough.
None of that makes the shapes worthless, and none of it is a secret — every one of these definitions is printed openly in the books that teach them. What it means is narrower and more useful: a continuation pattern is a description of a pause, and the continuation in its name is supplied by the future.
So the discipline is the one Part 07 has used since 07.02.01 and it has not changed. Fix the timeframe. Write the boundary down as a price before the next session exists. Check there was a prior move, per 07.01.02. Count the touches. Note which version of the rules you are using. Then wait, and let the chart do the classifying it was always going to do anyway.