Category Archives: Charts and Patterns

Chart Patterns: Gaps

A gap in a chart is basically an empty space between one trading period and the one prior to that trading period. They normally form on account of an important and material event that will affect security, like an earnings surprise or a merger agreement. Read this article to learn more!

The Flag & Pennant Pattern

Flags and Pennants are categorized as a continuous pattern. They normally represent only brief pauses in a dynamic stock. They’re typically seen immediately after a quick move. The stock will then take off again in the same direction. Click on this post for more information about Flags and Pennants.

V Top

The V top is a reverse V-shaped top, where the top is quite sharp. It’s due to the irrationality of actors leading to a steep increase that will be corrected shortly afterwards. Read this article to learn more!

Horizontal Channel

A horizontal channel is a pattern that underlines investor’s indecisiveness. This horizontal channel is assembled by two horizontal and parallel lines that build the progress of the price. To confirm a line, there should be at least two points of contact with the price. The more contact points it will has, the more these will be durable and their breakout will give an substantial buy/sell signal.

Descending Triangle

The descending triangle is a bearish continuation pattern. This pattern forms two converging lines. The initial is a downward slant which resistance and the other is a horizontal support. To validate the descending triangle, there must be oscillation between the two lines. The lines must be touched at least twice for validation.

Cup and Saucer

The Cup and Saucer is a chart with a continuous pattern, formed by two rounded bottoms, the first is deeper and wider than the second. The height of the cup and the handle will be aligned along a straight horizontal resistance. This is the neckline of the pattern. Read this article to find out more!