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Chart patterns

Cup and Handle PatternA Cup and Handle pattern is a bullish continuation pattern that resembles a teacup on a candle chart followed by a breakout. The cup part of the pattern is where the price gradually changes its direction from bearish to bullish. The handle part is when the price pullback slightly before roars higher and continues the previous trend. Cup and handle is used to understand the reinforcement of the trend and explains in case you want to double your position or sustain the position for a longer time period. This pattern can take between 30 to 60 candles to form on any given time resolution. 1. Cup: The cup should be “U” shaped and resemble a bowl or rounding bottom. Generally, cups with longer and more “U” shaped bottoms, the stronger the signal. The cup should not be too deep. The depth of the cup should retrace 1/3 or less of the previous advance. Volume should dry up on the decline and remain lower than average in the base of the bowl. 2. Handle: After the high forms on the right side of the cup, there is a pullback that forms the handle. The smaller the retracement, the more bullish the formation and significant the breakout. Sometimes this handle resembles a flag. If the right side of the handle breaks above the peak formed between the cup and the handle, it confirms that the pattern is complete and that the uptrend will resume. There should be a substantial increase in volume on the breakout above the handle's resistance. The projected advance after breakout can be estimated by measuring the distance from the right peak of the cup to the bottom of the cup.
HEducation
by MandeepSinghKohli
18
Symmetrical triangle (coils) (continuation pattern) Prints when the market is indecisive. Price market higher lows & lower highs. It is the situation where supply and demand are near to equal. The trading range becomes smaller and smaller within the triangle. It represents a pause in the exhausting trend after which the original trend is resumed. 1) The minimum requirement for a triangle is four reversal points. Many have 6 point requirements but at least four points. 2) In a symmetrical triangle, we get apex where two converged trend line meets. Apex also works as a very important support & resistance. Sometimes a return move will occur back to the penetrated trend line after the breakout occurs. 3) Duration: A minimum duration of 3 weeks and it rarely exceeds 3 or 4 months long. (less than 3 weeks of duration likely to be a pennant formation, not a symmetrical triangle) 4) Volume: Narrow volume within the triangle. Very low before the breakout. 5) Breakout: Price closing below the lower rising trend line confirms the breakout or Price closing above the upper falling trend line confirms the breakout. The direction of the break in the pattern can only be confirmed after the break has happened. Either Up or Down. 6) Buy: Buy the Stock a day after Price closing above the upper falling Trend line. Sell: Sell or short the stock day after Prices closing below the lower rising Trend line. 7)Target: – The technical price target is to measure the widest distance of the symmetrical triangle, Add the distance to the upper trend line breakout price for a buy target or Subtract the distance from a lower trend line breakout price for obtaining a covering price. 8) SL: usually, price closing above falling upper trend line is a Sell stop loss or price closing below rising bottom trend line is a buying stop loss. But very often, the gap between breakout price and trend lines is very wide. Or Stop: "Symmetric triangle" failures occur when price results in false breakouts. Stop below the first major "swing low" below the trend line for a long setup. Place a "stop" order above the first major swing high from the trend line for a short-setup. 9) Alert: To receive a valid signal, a closing price has to be above the resistance line or below the support line. The more the price moves to the very end of a triangle, the weaker will be the breakout in either direction. 10) Symmetrical triangle has two merging trend lines. For this formation, at least two peaks and two valleys are necessary. To reduce false breakouts, investors should wait until there are either three peaks and two valleys or three valleys and two peaks. With this approach, however, it is possible to completely miss a trend, How to avoid fake outs? 1. 200 EMA confirmation 2. Use trail SL
NSE:SBINEducation
by Trade-Technique
5
Nifty - Budget 2019 -H & S-Pattern Failure at 11625 What is a trendline A trendline is a straight line that connects two or more price points. Extending this line into the future, it also acts as a line of support or resistance. There are two types of trendlines—the up trend and the down trend. Trendline Rule The general rule in technical analysis is that it takes two points to draw a trend line and the third point confirms the validity. Trendline can be a neckline / support line as explained in the Head & Shoulder pattern in current scenario. Trading Strategy Plan A Sell below 11930 with strict stops above 11975 for targets 11875-11890 Below 11875 – 11830-11845 Plan B Buy in the zone 11830-11845 with strict stops below 11800 for targets 11950-11975 Above 11975 – 12000-12050 Above 12050 – 12100-12125 Plan C Sell below 11775 with strict stops above 11815 for targets 11700-11625/11650 Below 11625 – 11500/11525 --------------------------------------------------------------------------------------------------------------------------------------------- Previous Ideas --------------------------------------------------------------------------------------------------------------------------------------------- 29th April 2019 - How will you sell - X-wave mission 15th May 2019 - We got Gartley M 11th June 2019 - Head & Shoulder with Right Shoulder at 12000
NSE:NIFTYEducation
by WaveTalks
39