PRICE CHART FORMATIONS

Continuation (Consolidation) Patterns

Triangles-Symmetrical

A price bar pattern in which the slope of price bar highs and lows are converging to a point. Chartists "buy" on a break up and out of the Symmetrical Triangle or "sell" on a break down and out of the Symmetrical Triangle.

Ascending Triangle

A price bar pattern which consists of a horizontal line and an uptrend line. Chartists buy on a break up and out of the Ascending Triangle or sell on a break down and out of the Ascending Triangle. However, Ascending Triangles are generally thought to demonstrate a stronger bias towards predicting a break up and out of the Triangle.

Descending Triangle

A price bar pattern in which consists of a horizontal line and a downtrend line. Chartists buy on a break up and out of the Descending Triangle or sell on a break down and out of the Ascending Triangle. However, Descending Triangles are generally thought to demonstrate a stronger bias towards predicting a break down and out of the Triangle.

Pennants

Similar to a Symmetrical Triangle but generally "stubbier" or not as elongated. A price bar pattern which consists of an uptrend and a downtrend lines. Chartists "buy" on a break up and out of the Pennant or "sell" on a break down and out of the Pennant.

Rising Wedges

A price bar pattern which consists of 2 uptrend lines that are converging to a point. The slope of the lower line being steeper than the higher one. Chartists buy on a break up and out of the Wedge or sell on a break down and out of the Wedge. Rising Wedges, in the context of a prior downtrend are generally considered to have a stronger bias toward breaking down and out, as opposed to up and out.

Falling Wedges

A price bar pattern which consists of 2 downtrend lines that are converging to a point. The slope of the higher line being steeper than the lower one. Chartists buy on a break up and out of the Wedge or sell on a break down and out of the Wedge. Falling Wedges, in the context of a prior uptrend, are generally considered to have a stronger bias toward breaking up and out, as opposed to down and out.

Reversal Patterns

Head And Shoulders

Anticipates a decline on a break below the "Neckline."

Inverted Head and Shoulders

Anticipates a rise in prices on a break above the "Neckline."

Double Top

An M-shaped formation, looking for a break to the downside

Double Bottom

A W-shaped formation, looking for a break to the upside

Triple Top

Anticipates a change in trend from up to down.

Triple Bottom

Anticipates a change in trend from down to up.