By definition, a price pattern is a recognizable configuration of price movement that is identified using a series of trend lines and/or curves. … Technical analysts have long used price patterns to examine current movements and forecast future market movements.
Dow Theory explains the movement of the trend with respect to demand and supply, whereas price patterns explains the nature and characteristics of the trend and also its significance
A double top is an extremely bearish technical reversal pattern that forms after an asset reaches a high price two consecutive times with a moderate decline between the two highs. It is confirmed once the asset’s price falls below a support level equal to the low between the two prior highs.
Two equivalent bottoms with 1 month duration & high volume at the second bottom or the neck line and trend goes up above the neck line. … If the stock moves up again after touching the low which was previously formed then we can considered the trend is bullish.
The double bottom looks like the letter “W”. The twice-touched low is considered a support level.
A head and shoulders pattern is a chart formation that resembles a baseline with three peaks, the outside two are close in height and the middle is highest. In technical analysis, a head and shoulders pattern describes a specific chart formation that predicts a bullish-to-bearish trend reversal. The head and shoulders pattern is believed to be one of the most reliable trend reversal patterns. It is one of several top patterns that signal, with varying degrees of accuracy, that an upward trend is nearing its end
An inverse head and shoulders, also called a “head and shoulders bottom”, is similar to the standard head and shoulders pattern, but inverted: with the head and shoulders top used to predict reversals in downtrends.
, , Price Patterns, accumulation patterns, and descending triangles, angled up, ascending lows, ascending triangles, ascending troughs (lows), Breakaway Gaps, Buy Point, consolidation, continuation pattern, cup and handle, daily charts, descending peaks (highs), Double Bottoms, Double tops, down trend line, empty space, Exhaustion gaps, Flags, head and shoulders, higher highs, Higher lows, normal range, or a sideways market, or an uptrend line, Pennants, Price Patterns, recognizable configuration, reversal pattern, Runaway Gaps, short-term swing low, Stop Loss Locations, symmetrical triangles, technical analysis, trend direction, trend lines and/or curves, Trend lines in Technical Analysis, uptrend line, Wedges
