CHART Patterns
Head and Shoulders
is a reversal pattern consisting of three price
peaks, the middle being the largest.
It's potential in the opposite direction is
measured by the distance from top of middle
(head) to the base (neckline).
This price distance is extrapolated from
neckline at the point of breakout.
Double tops and double bottoms
are reversal patterns consisting of
two peaks with a price valley. To confirm
pattern, prices must form a pullback
(decline below and close below previously
established low). To predict move size,
measure height from high to low and project
under beltline (Vice versa for double bottom)
Flags and pennants
are continuation patterns, usually a pause
in fast, or almost vertical, price movement.
Flags are in the shape of a parallelogram,
while pennants are very short triangles.
BroadeningTriangles
can be continuation and reversal patterns,
this usually determined by the direction which
they point. Confirmation is at breakout,
and the strongest signals are when breakout
occurs between 1/2 and 3/4 the triangle length.
Ascending triangles
if the slope is upward, it is bullish
Descending triangles
if the slope is downward. it is bearish
Symmetrical triangles
means both triangle sides are approx.
the same size and angle; it is a neutral indicator.
Saucers
are reversal patterns which are slow and rounding
in form (at the end of a move). No clear breakout
signals occur because it is so slow; no clear
Support /Resistance areas are found either.
This pattern can last a long time. Be on the
lookout for any trending activity.
V-formations
are continuation patterns which begin
as initial reversals in trend. V direction is
opposite main trend. If it is a right triangle,
the market will breakout on the horizontal side
of the triangle.
Gaps
are areas in charts where no trading occurs and
are usually continuation patterns.
Runaway gaps
have strong fundamentals behind move, are not
quickly filled
Exhaustion gaps
are usually the largest gap,
usually filled, and have blow-off characteristics.
Breakaway gaps
are at end of price pattern or
when breaking major support ( or resistance),
and are usually filled.
Technical Analysis Indicators
Below find yet another detailed
Glossary of Technical Analysis Terms
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