CHART PATTERNS

Chart patterns are formations or shapes that appear on price charts of financial assets, such as stocks, currencies, commodities, or indices. These patterns are created by the movements of the asset’s price over time and are believed to reflect the underlying psychology of market participants.

Chart patterns can be broadly categorized into two types: continuation patterns and reversal patterns.

Head and Shoulders Pattern:-

Head and shoulders is a chart pattern in which a large peak has a slightly smaller peak on either side of it. Traders look at head and shoulders patterns to predict a bullish-to-bearish reversal.

 

RISING WEDGE:-

A rising wedge is represented by a trend line caught between two upwardly slanted lines of support and resistance. This pattern generally signals that an asset’s price will eventually decline more permanently – which is demonstrated when it breaks through the support level.

 

 

FALLING WEDGE:-

 

A falling wedge occurs between two downwardly sloping levels. In this case the line of resistance is steeper than the support. A falling wedge is usually indicative that an asset’s price will rise and break through the level of resistance, as shown in the example below.

 

BULLISH PENNANT:-

 

Pennants can be either bullish or bearish, and they can represent a continuation or a reversal. The above chart is an example of a bullish continuation.

 

DOUBLE BOTTOM:-

 

A double bottom chart pattern indicates a period of selling, causing an asset’s price to drop below a level of support. It will then rise to a level of resistance, before dropping again. Finally, the trend will reverse and begin an upward motion as the market becomes more bullish.

TRIANGLE CHART PATTERN:-

The triangle chart pattern is a technical analysis pattern formed by converging trend lines. It is called a triangle because the price movements create a shape resembling a triangle on the chart.