Charts and Patterns Archives - HowTheMarketWorks

Volatility Could Come Back in the Tech Sector

Luis Aureliano — Thu, 29 Jun 2017 15:28:07 +0000

There’s been a lot going on in the technology sector lately, with the NVIDIA Corporation (NASDAQ: NVDA) sell off and the selloff in late June after Alphabet Inc Class A (NASDAQ: GOOGL) got hit with a $2.7B fine, which pushed the stock down over 2% after the announcement. Volatility in NASDAQ-100 Now, in early June, Read More...

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Global Crude Oil Price Continues to Enjoy Bullish Tailwinds Despite Increase in U.S. Output

Luis Aureliano — Mon, 27 Feb 2017 16:09:35 +0000

Crude oil prices have been climbing up steadily in the last couple of months as investors continue to expect a balance in the demand and supply dynamics of oil. Last year, OPEC announced that it has worked out a deal with its member nations and some other producers to cut production volumes in order to Read More...

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What Do Traders Look for with Gold?

Luis Aureliano — Mon, 23 Jan 2017 16:36:10 +0000

Gold is currently trading at $1,215.85 per ounce, up 0.96% or $11.55. The precious metal has gained 6.40% over the past 30-day period, up $72.40. For the year to date, gold is up 4.7%, and it has an average return of 10.7% since 2002. Its best year on record in that time is 2007 when Read More...

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How To Trade Forex Using A Technical Indicator-Based Strategy

Luis Aureliano — Thu, 11 Aug 2016 13:26:59 +0000

When it comes to currency trading, there is a vast range of different strategies you can adopt to generate trading profits. For example, you could pursue an event-focused strategy, where you place trades just after large market-moving macroeconomic or political events. Alternatively, you could put on medium to long-term trades based on your view of Read More...

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Fibonacci Arcs and Fibonacci Retracement

Phil Simard — Wed, 09 Sep 2015 20:52:02 +0000

Fibonacci Arc is a technical analysis indicator and is utilized to give hidden support and resistance levels for security. It is built by drawing a trend line between two swing points on a chart.

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Double Bottom

HTMW Team — Sat, 01 Aug 2015 20:32:35 +0000

Double Bottoms are reversal patterns and often seem to be one of the most common (together with double top patterns) patterns for currency trading. Double Bottoms patterns are identified by two consecutive low prices of the same depth with a moderate pull back up in between (neckline peak).

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Head and Shoulders

Phil Simard — Thu, 09 Jul 2015 20:38:32 +0000

The head-and-shoulders pattern is one of the most popular chart patterns in technical analysis. The pattern looks like a head (the middle peak) with two shoulders (two equal heiight peaks).

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Cup With Handle

Phil Simard — Tue, 09 Sep 2014 20:26:25 +0000

A cup-and-handle chart pattern resembles a cup of tea. These are bullish continuation patterns where the growth has paused. momentarily, it trades down and then continues its upward pattern. This pattern must always be at least 5 weeks long and can last up to a year.

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What are Candlesticks (video 2 of 3)

HTMW Team — Sat, 16 Mar 2013 22:23:31 +0000

Candlestick charts are made up of red and green bars which are called candlesticks. What do they mean?

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How do candlesticks imply volume? Why is that critically important?

HTMW Team — Mon, 14 Jan 2013 09:13:43 +0000

You do not need anything else on a stock chart but the candles themselves to be a successful swing trader! And, there is nothing that can improve your trading more than learning the art of reading candlestick charts

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Stochastics

HTMW Team — Sat, 05 Jan 2013 20:06:56 +0000

In an upward-trending market, prices tend to close near their high, and during a downward-trending market, prices tend to close near their low.

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Good Earnings Surprise

HTMW Team — Thu, 20 Dec 2012 03:48:41 +0000

A good earnings surprise is a pattern in which a company circulates an earnings announcement. Then the market will interpret it as better than was expected.

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Bad Earnings Surprise

HTMW Team — Wed, 19 Dec 2012 09:50:22 +0000

An event pattern called a bad earnings surprise is where a company distributes an earnings announcement then the market defines it as worse than expected. Even in a bear market about 61% will have upward breakouts.

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Dead Cat Bounce, Inverted

HTMW Team — Tue, 18 Dec 2012 23:25:15 +0000

An inverted dead-cat bounce is quite the opposite of the dead-cat bounce. A quick look is if a trader owns a stock following a quick and large (5-20%) gain there is normally a gap up. If you sell on the next day after the gap up day, thus unlocking profits its because prices normally start falling before beginning a new move upward (Bulkowski, 2005).

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Dead Cat Bounce

HTMW Team — Tue, 18 Dec 2012 22:30:32 +0000

A trading term called a dead cat bounce is used to when a stock is in a severe decline and has a sharp bounce off the lows. It occurs due to the huge amount of short interest in the market. Once the supply and demand has become unbalanced, any type of bear market rally will create a massive short covering which will lead to a swift price move up. This bounce will be short lived and followed up by heavy selling which will break the prior price low.

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Chart Patterns: Gaps

HTMW Team — Tue, 18 Dec 2012 22:11:34 +0000

A gap in a chart is basically an empty space between one trading period and the one prior to that trading period. They normally form on account of an important and material event that will affect security, like an earnings surprise or a merger agreement.

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The Flag & Pennant Pattern

HTMW Team — Tue, 18 Dec 2012 21:51:30 +0000

Flags and Pennants are categorized as a continuous pattern. They normally represent only brief pauses in a dynamic stock. They're typically seen immediately after a quick move. The stock will then take off again in the same direction. Research shows that these patterns are many of the most reliable continuation patterns. Take a look at typical Flags and Pennant pattern.

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V Top

HTMW Team — Mon, 17 Dec 2012 19:07:47 +0000

The V top is a reverse V-shaped top thus the name. The top is quite sharp. It's due to the irrationality of actors leading to a steep increase that will be corrected shortly afterwards. The V top will occur most often in an upward trend and will often signal a trend reversal. It can also appear in a downward trend, like when in an economic announcement.

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V Bottom

HTMW Team — Mon, 17 Dec 2012 18:52:06 +0000

The V bottom is shaped like a V thus the name. The dip will be quite sharp. It's because the irrationality of actors leading to a steep fall which will be corrected shortly after. The V bottom will occur most often in a downward trend and will generally offer a signal trend reversal. It can also appear in an upward trend (like in an economic announcement).

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Horizontal Channel

HTMW Team — Mon, 17 Dec 2012 18:40:35 +0000

A horizontal channel is a pattern that underlines investor’s indecisiveness. This horizontal channel is assembled by two horizontal and parallel lines that build the progress of the price. To confirm a line, there should be at least two points of contact with the price. The more contact points it will has, the more these will be durable and their breakout will give an substantial buy/sell signal.

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Descending Triangle

HTMW Team — Sat, 15 Dec 2012 02:22:32 +0000

The descending triangle is a bearish continuation pattern. This pattern forms two converging lines. The initial is a downward slant which resistance and the other is a horizontal support. To validate the descending triangle, there must be oscillation between the two lines. The lines must be touched at least twice for validation.

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Symmetrical Triangle Top

HTMW Team — Fri, 14 Dec 2012 22:50:17 +0000

The symmetrical triangle top is a bullish continuation pattern. This pattern forms two trend lines which are symmetrical to the horizontal and convergent. The initial pattern is a bearish slant that gives resistance and the other is a bullish slant that will be the support. To prove a symmetrical triangle top, one must have oscillation between the two lines. Each of these lines must be touched at least twice for validation.

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Symmetrical Triangle Bottom

HTMW Team — Fri, 14 Dec 2012 22:38:42 +0000

A symmetrical triangle bottom is a bearish continuation pattern. This pattern forms two trend lines that are symmetrical to the horizontal and convergent. The initial one is a bearish slant that gives support and the other will be a bullish slant that will create a resistance. To prove a symmetrical triangle bottom there must have oscillation between the two lines. Each line has to touch at least twice for validation.

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Ascending Triangle

HTMW Team — Fri, 14 Dec 2012 02:36:00 +0000

The ascending triangle is a bullish continuation pattern. This pattern is made by two converging lines. The first line is an upward slant which is the support and the other is a horizontal resistance line. To validate the ascending triangle, there has to be an oscillation between the two lines. Each line has to be Read More...

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Cup and Saucer

HTMW Team — Fri, 14 Dec 2012 02:20:46 +0000

The cup with handle has a continuous pattern. This pattern is formed by two rounded bottoms, the first is deeper and wider than the second. The height of the cup and the handle will be aligned along a straight horizontal resistance. This is the neckline of the pattern.

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Rounding Top

HTMW Team — Fri, 14 Dec 2012 02:06:34 +0000

The rounding top pattern is a reverse U-shape, also called a "reverse saucer. " The top is rounded with a flat top. But as you'll see in many cases there are several bullish peaks and they will not put in question the validity of the pattern.

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Rounding Bottom

HTMW Team — Thu, 13 Dec 2012 20:38:51 +0000

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.

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Pennant

HTMW Team — Thu, 13 Dec 2012 19:29:26 +0000

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.

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Symmetrical Broadening Top

HTMW Team — Wed, 12 Dec 2012 02:27:13 +0000

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.

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Descending Flag

HTMW Team — Wed, 12 Dec 2012 02:11:24 +0000

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.

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Ascending Flag

HTMW Team — Wed, 12 Dec 2012 01:57:55 +0000

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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Bullish Channel

HTMW Team — Mon, 10 Dec 2012 22:31:18 +0000

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.

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Bearish Channel

HTMW Team — Mon, 10 Dec 2012 22:17:52 +0000

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.

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Triple Top

HTMW Team — Mon, 10 Dec 2012 22:06:22 +0000

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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Triple Bottom

HTMW Team — Mon, 10 Dec 2012 21:36:17 +0000

Triple bottom is a bullish pattern with a WV shape. Three bottoms will succeed, reflecting an important support. This will mark a reversal.

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Reverse Head and Shoulders

HTMW Team — Sat, 08 Dec 2012 00:17:05 +0000

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.

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Symmetrical Broadening Bottom

HTMW Team — Fri, 07 Dec 2012 18:28:38 +0000

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.

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Double Top

HTMW Team — Fri, 07 Dec 2012 18:10:21 +0000

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.

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Double Bottom

HTMW Team — Fri, 07 Dec 2012 00:33:15 +0000

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.

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Diamond Tops

HTMW Team — Fri, 07 Dec 2012 00:11:52 +0000

Diamond tops are a reversal pattern. This pattern is formed by two juxtaposed symmetrical triangles. It's shape is like a diamond.

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Diamond Bottoms

HTMW Team — Thu, 06 Dec 2012 23:51:48 +0000

A reversal pattern is called a diamond bottoms. This pattern is formulated by two juxtaposed symmetrical triangles. It is shaped like a diamond.

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Falling Wedge

HTMW Team — Thu, 06 Dec 2012 21:32:26 +0000

A falling wedge is a bullish reversal pattern made by two converging downward slants. To prove a falling wedge, there has to be oscillation between the two lines. Each of the lines must be touched at least twice for validation.

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Rising Wedge

HTMW Team — Thu, 06 Dec 2012 21:14:10 +0000

A bearish reversal pattern formed by two assembled upward slants is called a rising wedge. To validate rising wedge there must be oscillation between the two lines. These lines must be touched at least twice for validation.

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Double Tops or Adam & Eve

HTMW Team — Wed, 05 Dec 2012 23:04:04 +0000

Stock charts print different topping formations. Some are classics, like the Descending Triangle, which can be understood and traded with little effort. However the emotional crowd additionally generates many undependable patterns while greed slowly evolves into mindless fear. Complex Rising Wedges will challenge a technician's best effort at prediction while the unusual Diamond pattern burns trading capital swinging randomly back and forth.

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Broadening Wedges, Descending

HTMW Team — Wed, 05 Dec 2012 22:03:36 +0000

A bullish reversal pattern formed by two diverging downward slants is a descending broadening wedge. To validate an descending broadening wedge, there has to be an oscillation between the two lines. Each line has to touch at least twice for this validation.

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Broadening Wedges, Ascending

HTMW Team — Wed, 05 Dec 2012 20:22:14 +0000

The formation, ascending broadening wedge is called this because of its similarity to a rising wedge formation and then has a broadening price pattern.

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Broadening Tops

HTMW Team — Wed, 05 Dec 2012 02:52:02 +0000

Perhaps the recent Broadening Top and just a fractal footprint of the larger Rising Wedges that top into Broadening Tops, will somehow avoid both the Broadening Top and the far more bearish Rising Wedge, however there are several good and relatively current chart history suggesting this is not likely.

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Broadening Formations

HTMW Team — Wed, 05 Dec 2012 02:05:01 +0000

The right-angled and ascending broadening chart pattern is not one you might choose to trade. Other chart patterns perform much better. Downward breakouts have a big break even failure rate which may disqualify them from your trading tools. Upward breakouts have only a middling average rise, and that is if you trade them perfectly.

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Broadening Bottom

HTMW Team — Tue, 04 Dec 2012 02:34:46 +0000

The broadening bottom is one of those chart patterns that appears often, but you might want to avoid trading. The performance rank approaches the bottom of the list with a comparatively high break even failure rank and low average rise in a bull market. Its only redeeming value is the partial decline which does an excellent job of predicting an upward breakout.

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Ramp Screener

HTMW Team — Wed, 19 Sep 2012 05:10:53 +0000

Ramp is a chart pattern recognition screener for stocks and currency exchange markets Ramp will screen for stock patterns like breakouts, MACD divergences, Fibonacci retracements, W bottoms, head and shoulders, cup and handles and many other great trading setups. Ramp is a trendline scanner. You can scan for any combination of price trend lines. Identify trend Read More...

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Bollinger Bands

HTMW Team — Sun, 09 Sep 2012 20:57:48 +0000

Volatility is founded on the standard deviation, which modifies as volatility expands and declines. The bands spontaneously widen when volatility expands and narrow when volatility declines.

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Pivot Points

HTMW Team — Sun, 09 Sep 2012 20:48:35 +0000

Pivot Points use the previous period's high, low and close which will define future support and resistance. Pivots Points are important levels chartists utilize to decide directional movement, resistance and support

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