Price Patterns > Reversal Patterns (8)
-
Head and Shoulders Top
The Head & Shoulders pattern is the best known, widely accepted, and most reliable reversal pattern in it's category. Looking at the diagram, you can see how this pattern simply goes from higher highs & lows, to lower highs and lows. As the name implicates, this pattern should be found at the top of an uptrend. The break of the neckline with elevated levels of volume acts as a great entry signal to enter this trend reversal pattern.
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
-
Head and Shoulders Bottom
The Head & Shoulders Bottom has the exact same implications as the Head & Shoulders Top. However, the difference is that this pattern is inverted, and is found at the bottom of a downtrend. As you can see, the stock goes from lower highs & lows, to higher highs and lows. A break above the neckline with elevated volume acts as a great entry point to enter a bullish trade as the trend reverses.
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
-
Triple Top
The Triple Top is a bearish reversal pattern that forms at the top of an upward trending stock. Visually you can see how the trend fails to establish new highs when prices are rising. Once the stock breaks through support and confirms a lower low with elevated volume, this acts as a great entry signal to take a bearish position as the trend starts to reverse.
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
-
Triple Bottom
The Triple Bottom is a bullish continuation pattern that forms at the bottom of an downward trending stock. Visually you can see how the trend fails to establish new lows when prices are falling. Once the stock breaks through resistance and confirms a higher high with elevated volume, this acts as a great entry signal to take a bullish position as the trend starts to reverse.
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
-
Double Top
The Double Top is a bearish continuation pattern that forms at the top of an upward trending stock. Visually you can see how the trend fails to establish new highs when prices are rising. Once the stock breaks through support and confirms a lower low with elevated volume, this acts as a great entry signal to take a bearish position as the trend starts to reverse.
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
-
Double Bottom
The Double Bottom is a bullish continuation pattern that forms at the bottom of an downward trending stock. Visually you can see how the trend fails to establish new lows when prices are falling. Once the stock breaks through resistance and confirms a higher high with elevated volume, this acts as a great entry signal to take a bullish position as the trend starts to reverse.
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
-
Broadening Formation
This pattern is commonly referred to as the "Expanding Triangle" and commonly marks major market tops. It is unique compared to other triangles since volatility expands as the pattern forms, while with other triangles it contracts. Watch for a break of support to enter a bearish position as the trend reverses.
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
Triangles are commonly known as continuation patterns. The Symmetrical Triangle is the only exception. The price action within the pattern is relatively neutral, and while the majority of the time the stock moves with the direction of the prior trend, many times it doesn't. 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