Price Patterns

Ascending Triangle

The Ascending Triangle is a bullish continuation pattern. It consists of a horizontal resistance level and a ascending support level. An established uptrend is a very important prerequisite of trading this pattern. Once the stock breaks through resistance with good volume, this acts as a great entry signal for a bullish position.

Target Price: Determined by measuring widest distance between support & resistance.

Time Frame: Expect to hit your targe price within the amount of time the pattern took to form.

Volume: Essential

Descending Triangle

The Descending Triangle is a bearish continuation pattern. It consists of a horizontal support level and a descending resistance level. An established downtrend is a very important prerequisite of trading this pattern. Once the stock breaks through support with good volume, this acts as a great entry signal for a bearish position.

Target Price: Determined by measuring widest distance between support & resistance.

Time Frame: Expect to hit your targe price within the amount of time the pattern took to form.

Volume: Essential

Symmetrical Triangle

Symmetrical Triangles are commonly known as continuation patterns, but sometimes act as reversal patterns. The price action within the pattern is relatively neutral, but most of the time will break back into thedirection of the underlying trend. With this pattern, watch which direction it decides to break and plan your trade accordingly.

Target Price: Determined by measuring widest distance between support & resistance.

Time Frame: Expect to hit your targe price within the amount of time the pattern took to form.

Volume: Essential

Bull Flag

The Bull Flag is a very common continuation pattern that usually precedes a sharp (but not too sharp) movement in the underlying. After which the stock will consolidate in a narrow range that normally moves against the direction of the trend. As you look at the diagram, notice how the pattern resembles a flag. Once the stock breaks out of it's range with elevated volume, use this as a signal to establish a bullish position in the underlying.

Target Price: Determined by measuring widest distance between support & resistance.

Time Frame: Expect to hit your targe price within the amount of time the pattern took to form.

Volume: Essential

Bear Flag

The Bear Flag is a very common continuation pattern that usually precedes a sharp (but not too sharp) movement in the underlying. After which the stock will consolidate in a narrow range that normally moves against the direction of the trend. As you look at the diagram, notice how the pattern resembles a flag. Once the stock breaks out of it's range with elevated volume, use this as a signal to establish a bearish position in the underlying.

Target Price: Determined by measuring widest distance between support & resistance.

Time Frame: Expect to hit your targe price within the amount of time the pattern took to form.

Volume: Essential

Pennant

The pennant is a continuation pattern that is similar to both a flag and a symmetrical triangle. The shape of the pennant is a shorter term, and much narrowed version of the triangle. Like a flag pattern, it is usually preceded by a sharp move in the underlying. Use a break of resistance/support to take a trade in the direction of the underlying trend.

Target Price: Determined by measuring widest distance between support & resistance.

Time Frame: Expect to hit your targe price within the amount of time the pattern took to form.

Volume: Essential

Rising Wedge

The Rising Wedge is a bearish continuation pattern that forms in a downward trending stock. Many traders confuse this pattern as the name is a little counter intuitive. The Wedge is of the triangle family, and although it forms against the direction of the underlying trend, once it breaks support, use this as a signal to take a bearish trade in continuation of the downtrend.

Target Price: Determined by measuring widest distance between support & resistance.

Time Frame: Expect to hit your targe price within the amount of time the pattern took to form.

Volume: Essential

Falling Wedge

The Falling Wedge is a bullish continuation pattern that forms in a upward trending stock. Many traders confuse this pattern as the name is a little counter intuitive. The Wedge is of the triangle family, and although it forms against the direction of the underlying trend, once it breaks resistance, use this as a signal to take a bullish trade in continuation of the uptrend.

Target Price: Determined by measuring widest distance between support & resistance.

Time Frame: Expect to hit your targe price within the amount of time the pattern took to form.

Volume: Essential

Cup & Handle

The Cup and Handle is a bullish continuation pattern. As the name implies, there are two parts to the pattern: the cup and the handle. The cup forms after an advance and looks like a bowl or rounding bottom. As the cup is completed, a trading range develops on the right hand side and the handle is formed. A subsequent breakout from the handle's trading range signals a continuation of the prior trend.

Target Price: Determined by measuring widest distance between support & resistance.

Time Frame: Expect to hit your targe price within the amount of time the pattern took to form.

Volume: Essential