CHART PATTERNS

CHART PATTERNS

In financial market, the force of buyers and sellers creates a unique formation of

price patterns in the charts. These chart price patterns, if understand correctly gives

meaningful buy signal or sell signal. These chart patterns classified as continuous

patterns and reversal patterns. Below we present numerous Indian stock market

chart patterns.

Continuous chart patterns.

Continuous chart patterns means if you found the particular chart pattern in the chart,

It is a chart pattern found in the stock market resembling the cup with handle. The bottom

formed by the negative sentiment in the market. Then the positive fundamentals of the

scripts drive the buyers to buy at the bottom. Generally it is considered as the continuation

pattern found in the bull stage and bear stage.

Symmetrical triangles

Symmetrical triangle is a continuous chart pattern found in bull stage and bear stages of

the market. It is easily recognizable with clear shape. The seller sells the script at lower

and lower prices. The buyers buy the script at higher and higher prices. Due to these two

forces gives the symmetrical triangle shape to chart. If the market sentiment turns to positive the buyers will get the edge and drive the prices to breakout the seller’s trend line.

Bear flags

Flags considered as continuation pattern. Normally it is found in bull stage and bear stage.

Sellers sell the stock at higher and higher prices; buyers buy the stock at higher and higher

prices. At the end of pattern the negative fundamental or the negative market sentiment

drive the seller to sell the price at lower prices

Bearish pennants

Pennants are most reliable continuation pattern. It rarely produces the trend reverse result. These are the temporary halting area in the continuous up trend or the downtrend of the stock. It is much like the flag. Here the sellers’ trend line slopes downward towards the buyers’ trend line.

Wedge pattern in stock prices formed by two converging trend lines both formed by the

found in the bull market and bear market. The interpretation of wedge is complicated as

the resultant price movement may go either direction. It is looks like the pennant and

resemble like the flags.