Price patterns and their characteristics

Types : Double Top, Double Bottom, Head and Shoulder, Cup pattern, Flag Pattern, Triangle pattern, Candlestick pattern – (Bullish Engulfing/Bearish Engulfing, Bullish / Bearish Piercing line, DOJI, Hammer / Hanging Man)

Two equivalent top , duration between 2 tops should be min 20 days and volume should be high. If the Volume is high and price is moving down from the previous bottom, it is the bearish trend and choose short.

Head and Shoulder pattern occurs when the market trend is in the process of reversal either from Bullish / Bearish pattern..

The Head should be the highest amount the recent price movement, the volume during Left shoulder should be high and Right shoulder volume should be low as possible and if position is breaking down the neck line we can determine bearish trend / Short position

Stocks are being accumulated over a period of time(6 months) in low volume .. this forms a cup pattern..the sideways pattern forms at the bottom level. When the cup is getting filled then that is the indication of bullish trend where one can start buying.

A steeper pole pattern with rectangular shaped sideways movement with less time to form, positive pole flag should give positive breakout, volume is expected to be high while breakout .. Flag pattern is an impulsive behaviour

The line chart forming 5 wave corrective pattern .. connecting the tops and the bottoms is called triangle pattern.. duration should be min. 1.5 months. triangle breakout expected around 70% zone with good volume.

1 Comment
  1. vignesh 6 years ago

    Hi,
    your answers are well framed and appropriate.

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