Volume spikes up which is exactly the confirmation needed for any trend line break. Now the market drifts lower in a smaller correction called the handle. Volume eases as prices drop indicating a lack of sellers. When the handle pattern is broken, volume spikes again and the stock is off and running. Handles should never dip too far into the cup and usually last a few short weeks.
Deep handles indicate a larger trading range rather than a small correction in a rising market.
As in most real world situations, the cup with handle is not always a text book case. First, the right side of the cup did not quite reach old high. Second, the handle was shaped like a triangle rather than a flag. As a metaphor, the latter would be easier to hold but both show downward movement of prices on lower volumes. As long as the other criteria are met, these imperfections can be tolerated.