Chart Patterns Archive

FLAG AND PENNANT PATTERN just a breather Characteristics: 1. There is a clear direction of the price trend; 2. This is followed by a consolidation and range bound movement; and 3. Next is the resumption of the trend. The Flag Pattern The flag pattern is covered by two parallel lines. This pattern can be flat [...]

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WEDGE PATTERN a temporary stop of the primary trend Characteristics: 1. It is a contracting range in prices; 2. This is coupled with an upward trend in prices (the rising wedge) or 3. It is paired with a downward movement of prices (the falling wedge). Brief Explanation: A wedge pattern is considered to be a [...]

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TRIPLE TOP PATTERN a good time to sell Characteristics: 1. Volume is usually low during the second rally up and lesser during the formation of the third top; 2. The peaks may not be spaced evenly (like the double top); 3. The valleys may not bottom at exactly the same level; and 4. The triple [...]

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DOUBLE TOP PATTERN buyers and sellers taking turns Characteristics: 1. A financial instrument runs up to a particular level; 2. It then drops back from that level; then 3. Makes a second run at that level; and 4. Finally drops back off again. Significance: The double top pattern shows that demand exceeds supply (there are [...]

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CUP AND HANDLE PATTERN (CAHP) a cup preceding its handle Characteristics: 1. A cup and handle formation should follow a trend increase, ideally one that is a few months old; 2. The cup must always precede the handle. The cup must form a rounded bowl shape, with a clear bottom; 3. The cup must last [...]

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HEAD AND SHOULDERS PATTERN (HASP) a head and two shoulders Characteristics: The HASP has a structure that is visually similar to that of a head with two shoulders. It has four elements: 1. A left shoulder (a relative peak) 2. A head (a peak above both shoulders) 3. A right shoulder (a peak parallel to [...]

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