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10 Most Popular & Trusted Chart Patterns10 Most Popular & Trusted Chart Patterns Chart patterns are crucial tools for traders to predict price movements in financial markets. They help traders predict future trends and the direction of a stock or any other security. In this article, we'll explore the 10 most popular and trusted chart patterns, covering both continuation patterns that signal a trend's persistence and reversal patterns that indicate a trend change. 10 Popular and Trusted Chart Patterns These are 10 of the popular and reliable chart patterns used for technical analysis as below. 1. Head and Shoulders The head and shoulders pattern on a chart features a prominent peak with two smaller peaks on either side. Traders analyze this pattern to anticipate a shift from bullish to bearish trends. Usually, the first and third peaks are smaller than the central peak, and they all retreat to a common support level called the 'neckline'. When the third peak declines to this support level, it often leads to a breakout into a bearish downtrend. 2. Double Top/Bottom The Double Top pattern is a chart formation indicating a potential trend reversal in trading markets. It forms after an uptrend when the price reaches a peak (the first top), retraces, and then rises again to a similar peak (the second top), forming a resistance level. This pattern suggests that buyers are becoming less aggressive, potentially leading to a downtrend as sellers gain control and push prices lower after failing to surpass the resistance level. 3. Double Bottom The double bottom on the charts indicates a change in market direction from bearishness to possible bullishness. It appears after downtrends when the price goes down to a low level twice (as two ‘bottoms’) but it does not decline further on each occasion. This pattern suggests that selling pressure has weakened and buyers may start pushing prices higher. Traders often see it as a signal to anticipate a potential upward movement in the market. 4. Rounding Bottom The Rounding Bottom, or saucer bottom, is a bullish chart pattern signaling a potential reversal from a downtrend to an uptrend. It occurs when prices gradually dip to a low point and then start rising slowly and steadily in a curved shape like a bowl. Traders look for this pattern as it suggests a shift in sentiment from selling pressure to buying interest, indicating a possible opportunity to enter long positions as the trend reverses upwards. 5. Cup and Handle The cup and handle pattern is bullish and indicates a brief period of negative market sentiment before the main uptrend resumes. The cup resembles a rounding bottom pattern, while the handle resembles a wedge pattern, as discussed later. After forming the rounding bottom, there's typically a temporary pullback called the handle, confined within parallel lines on the price chart. The asset eventually breaks out of this handle phase and continues its upward trend. 6. Wedges Wedge patterns in trading are formed by converging trendlines that slope either upward or downward. A rising wedge is bearish, suggesting potential price declines, as the highs and lows tighten over time. On the other hand, a falling wedge is bullish, indicating potential price increases, as the highs and lows also converge but in a downward direction. Traders look for breakouts from these patterns to confirm trend continuations or reversals, using them to anticipate future price movements in the market. 7. Pennant or Flags A pennant is a short-term chart pattern that forms after a strong price movement, resembling a small symmetrical triangle. It represents a temporary consolidation or pause in the trend, where the price moves within converging trendlines that resemble a pennant shape. Typically, a pennant is a continuation pattern, suggesting that after the brief consolidation, the prior trend is likely to resume. Traders often watch for a breakout above or below the pennant's trendlines to confirm the direction of the next significant price movement. 8. Ascending Triangle An ascending triangle is a bullish pattern. It forms when the price moves upward within a confined area, with a flat resistance level and a rising support trendline. Traders interpret this pattern as a sign of increasing buying pressure as the price repeatedly tests the resistance level. Typically, when the price breaks above the horizontal resistance line of the triangle, it often continues upward, making it a potential signal for traders to enter long positions or to expect further bullish movement in the market. 9. Descending Triangle The Descending Triangle pattern is a bearish continuation pattern in technical analysis. It forms when the price action creates a horizontal line (support) and a descending trendline (resistance). Traders interpret this pattern as a signal that the downtrend is likely to continue, as sellers become more aggressive near the resistance level while buyers fail to push the price higher. 10. Symmetrical Triangle The symmetrical triangle pattern in technical analysis shows a period of indecision in the market, with converging trendlines forming a triangle shape. It doesn't indicate a clear bullish or bearish bias initially. Traders watch for a breakout above the upper trendline for a potential bullish continuation or below the lower trendline for a potential bearish reversal. It's important to confirm the breakout with increased volume to validate the pattern's significance. Conclusion Learning about chart patterns helps you understand how markets behave. While these patterns give important clues, remember that no strategy always works perfectly. It's important to use them with other indicators and manage risks carefully. By being patient and staying disciplined, you can make informed decisions that fit your trading plans.
NSE:FINNIFTY1!
by Dhan
Best Chart Patterns For Beginners.Hello Guys This Is My First Idea So Please Support Me And Like And Follow Me. Best Chart Patterns For Beginners. Head And Shoulders. Inverse Head And Shoulders. Double Top. Double Bottom. Rounding Bottom. Rounding Top Cup And Handle. Inverse Cup And Handle. Rising Wedges. Falling Wedges. Pennant. So Our First Pattern is Head And Shoulders: A head and shoulders pattern is also a trend reversal formation. It is formed by a peak (shoulder), followed by a higher peak (head), and then another lower peak (shoulder). A “neckline” is drawn by connecting the lowest points of the two troughs. Inverse Head And Shoulder: An inverse head and shoulders pattern is comprised of three component parts: After long bearish trends, the price falls to a trough and subsequently rises to form a peak. The price falls again to form a second trough substantially below the initial low and rises yet again(Opposite Of Head And Shoulder) Double Top: A double top is an extremely bearish technical reversal pattern that forms after an asset reaches a high price two consecutive times with a moderate decline between the two highs. It is confirmed once the asset's price falls below a support level equal to the low between the two prior highs. Double Bottom: A double bottom pattern is a technical analysis charting pattern that describes a change in trend and a momentum reversal from prior leading price action. It describes the drop of a stock or index, a rebound, another drop to the same or similar level as the original drop, and finally another rebound (Opposite Of Double Bottom) Rounding Bottom: A rounding bottom is a chart pattern used in technical analysis and is identified by a series of price movements that graphically form the shape of a "U". Rounding bottoms are found at the end of extended downward trends and signify a reversal in long-term price movements (Opposite Of Rounding Top) Rounding Top: A rounding top is a chart pattern used in technical analysis identified by price movements that, when graphed, form the shape of an upside-down "U." Rounding tops are found at the end of extended upward trends and may signify a reversal in long-term price movements. Cup And Handle: A cup and handle is a technical chart pattern that resembles a cup and handles where the cup is in the shape of a "u" and the handle has a slight downward drift. A cup and handle are considered a bullish signal extending an uptrend, and it is used to spot opportunities to go long. Inverse Cup And Handle: An 'inverted cup and handle' is a chart pattern that indicates bearish continuation, triggering a sell signal. Think of it as an upside-down cup and handle. If you look at the regular cup and handle pattern, there is a distinct 'u' shape and downward handle, which is followed by a bullish continuation (Opposite Of Cup And Handle). Rising Wedges: A rising wedge is generally a bearish signal as it indicates a possible reversal during an uptrend. Rising wedge patterns indicate the likelihood of falling prices after a breakout through the lower trend line. Falling Wedges: The falling wedge pattern is a continuation pattern formed when the price bounces between two downward slopings, converging trendlines. It is considered a bullish chart formation but can indicate both reversal and continuation patterns – depending on where it appears in the trend(Opposite Of Rising Wedges). Pennant: The bull pennant is a bullish continuation pattern that signals the extension of the uptrend after the period of consolidation is over. Unlike the flag where the price action consolidates within the two parallel lines, the pennant uses two converging lines for consolidation until the breakout occurs (Bullish Continuation) Thank you for giving me your precious time please like and follow me one more thing next idea is on Types Of Trader bye bye, for now, I will meet again new idea.
NSE:DRREDDY
by DarshTrader
IMPORTANT MARKET STRUCTURE+CHART PATTERNSTRADING WITH CHARTS CAN BE FRUITFUL IF YOU CAN COMBINE IT WITH MARKET STRUCTURE THAT'S THE CRUSIAL THING ABOUT PRICE ACTION TRADING, MANY PEOPLE THINK THAT DRAWING CHART PATTERNS AND TRADING THOSE IS VERY SIMPLE AND THEY ALSO GET GOOD RESULTS IN SOME TRADES BUT AFTER THEY INCREASE THEIR POSITION SIZING THEY ARE CRASHED DOWN BY THE MARKET, AND THEN SAY BLAME THAT PATTERNS DON'T WORK OR PRICE ACTION DO NOT WORK, BUT HAVE YOU EVER LEARNED IT PROPERLY? HAVE TOY EVER BACKTESTED OR FOREWARD TESTED IT? A PROFESSIOANL CHARTIST SPENDS 8- 9 HOURS A DAY WITH HIS CHARTS. SO WHAT DO YOU SAY? SO MY POINT IS IF YOU WANT TO TRADE THE CHART PATTERNS THEN KNOW THE RIGHT WAY OF DRAWING IT AND THE TIME FRAME IS ALSO CRUSIAL BECAUSE YOU CAN SEE MULTIPLE TYPES OF CHART PATTERNS ON MULTIPLE TIME FRAMES WHICH WILL BE MAKING YOU MORE CINFUSED RATHER THEN TO HELP YOU OUT. LEARN THEN EARN AND TRUST THE PROCESS. THANK YOU -RV
NSE:NIFTY
by Rv-The-Trader
2
Simple chart patterns in Nifty for 13 octoberOnce of the simplest as well the most powerful chart patterns is consolidation and range breakouts . Analysis daily charts of the nifty, show that the negative global new of the war has not much effected nifty as single red candle after news is followed by a big green candle and a trendline breakout which shows the strength of the buyers and a trader we should plan to trade with trend instead of fighting it, so we should be a little biased towards uptrend in coming days and should plan for selling only if nifty falls below 19600. Currently nifty has broke out a trend line and consolidating in a range of 19775- 19850 for last two day which show that a big trend is coming ahead after a breakout or breakdown now How we can plan for tomorrow 1) best case scenario markets open flat in the range, the plan will be simple if nifty crosses 19850 for easy 50 points move with a small stop loss and can hold as per the price action or if it breakdowns 19870 we can also take a small 50 -70 points trade in short side as market can come back for a small retest.( keep in mind big sellers will only after it crosses below 19600 so for selling only plan for a small target as support zone is strong at 19700 2) market opens a gap u around 19800-19850 market is in good trend so if it hold above 19840 for 5-10 mins we take trade at call side with a small stop loss of 20-30 points 3) market opens a gap down , if market opens a gap down it will be a little confusing as buyers and sellers will be fighting for the trend but if market opens a big gap down then it can be big down side trend as there will be breakout failure and all buyers will be trapped and SL hunting will happens and new buyers will also add below 19600 its just for educational purpose trade at your own risk
NSE:NIFTY
by chart_analytics_kb
Alpa Cup and Handle Pattern - Bullish### Chart Patterns: 1. **Cup and Handle Pattern**: - **Cup**: The price action from mid-2021 to mid-2023 resembles a cup formation, with a rounded bottom indicating accumulation. - **Handle**: Following the cup, the recent price action seems to form a handle, typically characterized by a downward consolidation. 2. **Descending Triangle**: - There is a descending triangle visible within the handle part of the cup and handle pattern. This is typically a bearish continuation pattern, but in this context, it could be part of the handle formation. ### Volume Profile: - The volume profile on the right shows the price levels where the most volume has been traded. - There is a significant volume build-up around the 70-85 level, suggesting a strong support zone. ### Support and Resistance Levels: - **Support**: Around 65-70 (based on volume profile and historical price action). - **Resistance**: Around 93-95, which coincides with the upper boundary of the descending triangle and the previous highs. ### Indicators: - **RSI (14)**: The RSI is around 51.48, which is neutral. It indicates that the stock is neither overbought nor oversold. The RSI is also showing a slight uptick, suggesting a potential bullish momentum. ### Key Observations: - The breakout above the descending triangle's upper boundary (~93-95) with strong volume could signal a bullish move. - The cup and handle pattern generally signals a continuation of the previous uptrend if the price breaks above the handle with strong volume. - The volume has been increasing, indicating growing interest in the stock. ### Potential Scenarios: 1. **Bullish Scenario**: - A breakout above the 93-95 resistance level with strong volume could lead to a significant upward move, confirming the cup and handle pattern. - Targets could be around the 110-120 range, aligning with the height of the cup added to the breakout point. 2. **Bearish Scenario**: - If the price fails to break out and falls below the support zone around 65-70, it might indicate a further downside. - In such a case, the next support levels would be around 50-55. ### Strategy: - **Entry**: Consider entering a long position on a confirmed breakout above 93-95 with strong volume. - **Stop Loss**: Place a stop loss below the handle's low, around 70, to manage risk. - **Target**: Aim for the 110-120 range based on the cup and handle pattern projection. This analysis combines technical patterns, volume profile, and RSI to provide a comprehensive view. Always consider other fundamental and market factors before making a trade decision.
NSE:ALPA
by brijmohan_h
Anupam Rasayan - Inverse H&S Breakout on Weekly ChartChart patterns are the most loved trading strategy among traders. There are different kind of patterns traded in stock market. One of which is inverse head and shoulder - a trend reversal pattern. Upon formation of this pattern the stock trend get reversed. Generally if the stock is in consolidation phase then this pattern is seen. Now here I have observed inverse head and shoulder pattern formation in one of the chemical manufacturing company in India named Anupam Rasayan India Ltd. On closely observing the chart, I found that the stock is in downtrend since May 2022 after making a high of 1234 and remain in downtrend till Oct 2023. Now the fresh uptrend in the stock is supported by inverted head and shoulder pattern which signifies that the stock can continue the uptrend in coming months. The targets for this stock can be found by projecting the depth of head just after the breakout which comes around 1320. Also the stop loss for this trade can be put at the depth of right shoulder which is around 990. Disclaimer: The stock shared is only for educational purpose and does not hold any buy or sell recommendations.
NSE:ANURASLong
by Vipin_Dixena
BEARS RIDING DOWN EICHER MOTORS ???!!!Chart patterns does insist me to go with opinion stated above. Reasons: 1. Eicher motors is travelling (and respecting) in different patterns . 2. June 2022 , Eicher motors broke out of major triangular pattern and rose to about 35% . 3. Monthly(November 22) candle - Bearish engulfing candle , Oct 2022- Hanging man candle confirming the Bearishness. 4. It is also travelling in a ascending channel pattern (as you can see it is currently in the down move inside the pattern). 5. Stock has given Breakdown(11 nov candle) with superb volume out of a trendline. 6. Head & Shoulders pattern in Daily time frame and given breakdown on 2 Dec with good volumes. 7. Target & SL levels mentioned in the chart... I can show things separately and clearly in weekly daily monthly charts...but trading view allows only members who have reputation of 10 (or paid ones) to use that feature while publishing ideas. Soon I will earn that 10 points . Sorry if chart looks so congested....Feel free to ask if there is any confusion. Let's wait and watch how it moves!!!! Note - Just Sharing my view...not a tip nor advice...
NSE:EICHERMOTShort
by mmjimm
4
MCDOWELL_N Analysis- in verge of notable Down move ??!!!Chart patterns look prudent for the above titled opinion REASONS 1. MCDOWELL_N has been trading inside a Ascending channel pattern (taking support and resistance at perfect channel levels)( shown below Monthly chart for broad view) 2. Monthly Breakdown by witnessing the January month candle(with volume bump) with low too tested the next month 3. Inside the Ascending channel pattern, it is undergoing the downswing move in the form of descending expanding channel pattern (shown by white trendlines) 4. High and Lower high too formed ....but we need lower low in the weekly chart to confirm the upcoming strong bearish move (shown below in weekly chart ) 5. There is also a BEARISH PENNANT (shown in the above weekly chart itself) yet to breakdown!!! 6. SL level mentioned @ chart 7. Better to enter after breakdown...if entering now, take 736 as target 8. It needs to break the 730 level for the fat bearish move !!! 9. Will update target levels once it gives breakdown!!! Let's wait and watch how it moves!!! Note- Just sharing my view...not a tip nor advice!!! Regards, mmjimm
NSE:UNITDSPRShort
by mmjimm
Nifty - Stupendous rally continues. 8550-8600 on the cards soon.Chart patterns depict human behavior and patterns repeat because human behavior doesn't change. I wrote on 27th Nov,16 that this double bottom 'W' pattern might emerge and it played out amazingly well. People will be bewildered with this rally. Market internals like BankNifty, CNXIT & Reliance all are showing strength. Nifty has risen from 7900 to 8460 in a flash. Post consolidation for a few days it should start moving up again. This might be similar to last year phenomena when Nifty rose from 6800 to 9000 without giving significant declines. Today's weekly closing is very important. Closing above 8330-50 will confirm breakout on the weekly charts. FII's long positions build up in Index futures is confirming the breakout. Don't short play long keep booking some profits at important stops and reenter on supports. Cheers
NSE:NIFTYLong
by Boult2100
RELIANCE to Dip via Inverted Cup & Handle ??!!Chart patterns look good for a short trade in Reliance industries REASONS 1. RELIANCE has been trading inside an Ascending Channel and currently it is down under its Downswing move inside the channel 2. There is a Monthly breakdown (shown in chart) out of a 5 year old trendline support Monthly timeframe chart below - 3. In weekly chart shown below, we can clearly witness lower high and lower low formed recently confirming Bearishness!! 4. In daily timeframe , it is trading in the form of an Inverted Cup & Handle and its due for Breakdown!! 5. Target levels mentioned as Horizontal dashed green lines 6. SL can be day candle closing out of the purple slanting trendline 7. Safe Entry can be after 2hr Breakdown out of the Inverted cup & handle pattern. Let's wait & watch, how it moves!!! NOTE - Just Sharing my View....not a tip nor advice!!!!
NSE:RELIANCEShort
by mmjimm
5
HEROMOTOCO Ready for Bulls Ride ??!!!!Chart patterns convincing me to post the above titled opinion REASONS 1. HEROMOTOCO has been trading inside a Expanding Triangular Pattern by Taking support & resistance at respective levels 2. Currently, it is going through the up swing move inside the pattern 3. 2022 November Monthly candle seems to be an INDICATION for RACING BULLS ARRIVAL(with high tested) 4. No other Auto stock gave such a Bullish November candle 5. The same November candle broke and closed above the WHITE trendline with Volume SUPPORT!!! 6. Inverted Head & Shoulders pattern formed, Same November candle seems to be the breakout candle again!!! 7. Big move can be expected in the coming days.... (Probability looks more for the upside!!) 8. Target & SL levels mentioned @ chart 9. HEROMOTOCO composes 5.97% WIEGHTAGE in NiftyAuto index and 0.47% in Nifty50 index !!! Monthly chart close look below DAILY TIME FRAME BELOW Let's wait and watch how it moves!!!! Note - Just sharing my view....not a tip nor advice!!!!
NSE:HEROMOTOCOLong
by mmjimm
SIEMENS Ready for a Sharp CORRECTION MOVE ??!!!Chart patterns poise way for the above titled opinion Reasons 1. SIEMENS travelling in a Ascending channel (From 2019)(Bright red & green lines shown in chart). 2. Now, it seems ready for the downswing (white trendline descending channel shown in chart) inside the Ascending channel. 3. Rounding top too confirming the chances of down move . 4. GAP b/w 6th & 7th December is acting as Support. Entry can be made after the yellow trendline gets broken.(Keeping the high of the breakdown candle as SL) FIB 0.5 can act as support in downside(1st target)- 2645 Safe SL mentioned @ chart.(IF WE ENTER NOW) Let's wait & watch how it moves!!!! Note - Just Sharing my view...not a tip nor advice!!!
NSE:SIEMENSShort
by mmjimm