Price pattern is a recognizable configuration of price movement that is identified using a series of trendlines and/or curves.
Dow Theory helps us in identifying the demand and supply, in turn, the trend of the market i.e, positive or negative. … Price pattern which takes the base of the Dow theory gives the characteristic behind the price movement in addition to identifying the supply and demand.
The Double Top Reversal is a bearish reversal pattern typically found on bar charts, line charts, and candlestick charts. As its name implies, the pattern is made up of two consecutive peaks that are roughly equal, with a moderate trough in-between.
The Double Top Reversal is a bearish reversal pattern typically found on bar charts, line charts, and candlestick charts.
The Double Bottom Reversal is a bullish reversal pattern typically found on bar charts, line charts, and candlestick charts.
Head and Shoulders formation consists of a left shoulder, ahead, and a right shoulder and a line drawn at the neckline. The left shoulder is formed at the end of an extensive move during which volume is noticeably high.
A rounding bottoms look similar to the cup and handle pattern, but does not experience the temporary downward trend of the “handle” portion. The initial declining slope of a rounding bottom indicates an excess of supply, which forces the stock price down. The transfer to an upward trend occurs when buyers enter the market at a low price, which increases demand for the stock. Once the rounding bottom is complete, the stock breaks out and will continue its new upward trend.
Flag and pennant chart patterns are short-term continuation patterns that are formed when there is a sharp price movement followed by a sideways price movement.
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