Price pattern indicates the characteristic or strength of the trend. Various price patterns are Double top, double bottom,flag,triangle etc.Dow theory indicates the market trend where as price pattern shows the basic characteristic of the trend or the strength of the trend.Double top or bearish trend is a price pattern which gets established because of below factors:
Equivalent Tops.
Duration between Equi tops should be at least 1 month and more.
High volume should be there at 2nd top or while crossing the neckline.
Head and shoulder pattern is a accumulation and distribution pattern.
It comprises of a left shoulder, head higher than left shoulder and right shoulder.
The total time frame for the structure to evolve is 3 months.. High volume is visible on left shoulder .Stronger Price pattern takes long duration for formation. It indicated accumulation pattern. The cup shape pattern is visible.Lackluster volume should form the rounding bottom.
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