Skousen Investor CAFÉ is an electronic newsletter distributed weekly and written by Dr. Mark Skousen. Mr. Skousen offers valuable comments on today’s markets, the economy, politics and other pertinent topics of interest and how they will affect individual investors.
The U-shaped bottom is a rounding bottom, also called a “saucer. ” The dip is rounded with a flat bottom. But we’ll see in many cases there are several bearish peaks, but they do not question the validity of that pattern.
The pennant resembles the symmetrical triangle, but it’s characteristics are not the same. The pennants is shaped like a wedge of consolidation. Its normally appears after a sudden upward or downward movement. The life of a pennant is short according to the time frame used.
The symmetrical broadening top is called a bullish continuation pattern. This pattern is formed by two symmetrical horizontal lines that are divergent. It looks like an inverted symmetrical triangle or an open triangle. The oscillations in the middle of the two bands of the triangle are consequently becoming more and more sizable. Each line has to touch at least twice for validation.
The descending flag shows as a continuation pattern. The flag is built by two straight downward parallel lines which is shaped like a rectangle. It is oriented in the direction of that trend which it consolidates. Contrary to a bearish channel, this pattern is quite short term and shows the fact that buyers will need a break.
An ascending flag is a continuation pattern. The ascending flag is formed by two straight upward parallel lines which are shaped like a rectangle. It is adjusted in the direction of the trend that it consolidates. Contrary to a bullish channel, this pattern is quite short term and marks the fact the seller will need a break.
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A bullish channel is called a continuation trend pattern. The bullish channel is assembled by two parallel lines that frame the upward price trend. A line is validated when there has been at least two points of contact with the price. The more contact points it has, the stronger the trend line is and the more their breakout will give a strong sell signal.
A bearish channel is a continuation trend pattern. The bearish channel is arranged by two parallel lines that frame the downward price trend. To certify a line, there has to be at least two points of contact with the price. The more contact points it has, the more the trend line is stronger and their breakout will give a stronger buy signal.
The triple top is a bearish pattern with an MN shape. Three bottoms will come in succession, reflecting an important resistance. This marks a reversal will.
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Reverse head and shoulders is a trend reversal pattern. It will mark a desire to make a bullish reversal. The theory is the same as a triple bottom other than the second bottom will be lower than the others, which are technically at the same height. The reverse head and shoulders pattern will be formed by three bottoms that will succeed.
The symmetrical broadening bottom is called a bullish reversal pattern. This pattern is formulated by two symmetrical horizontal lines that are divergent. It is an inverted symmetrical triangle or looks like an open triangle. The oscillations between the two bands of the triangle are consequently becoming more sizable. Each line has to be touched at least twice for a validation.
The double top is a bearish pattern shaped like an M. Two tops must succeed, imaging an important resistance. This marks a reversal. The pattern may also be in WV shape. We can consider a triple top as well.
The double bottom is a bullish pattern indicated by a W shape. The two bottoms will succeed, mirroring an important support (in green). This will mark a reversal will. The pattern may also be in a WV shape. We’ll discuss a triple bottom.
