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Chart Notes

1. The ascending triangle is a bullish pattern indicating an upward breakout is likely as the horizontal resistance line converges with the ascending support line. 2. The descending triangle represents a bearish downtrend, with a horizontal support line and descending resistance line, suggesting a downward breakout. 3. In a symmetrical triangle, the support and resistance lines converge, allowing for a breakout in either direction, though it often follows the overall market trend.

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4K views

Chart Notes

1. The ascending triangle is a bullish pattern indicating an upward breakout is likely as the horizontal resistance line converges with the ascending support line. 2. The descending triangle represents a bearish downtrend, with a horizontal support line and descending resistance line, suggesting a downward breakout. 3. In a symmetrical triangle, the support and resistance lines converge, allowing for a breakout in either direction, though it often follows the overall market trend.

Uploaded by

Amit Wadekar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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1.

Ascending triangle
The ascending triangle is a bullish ‘continuation’ chart pattern that signifies a breakout is likely where the triangle lines converge. To
draw this pattern, you need to place a horizontal line (the resistance line) on the resistance points and draw an ascending line (the
uptrend line) along the support points.

2. Descending triangle
Unlike ascending triangles, the descending triangle represents a bearish market downtrend. The support line is horizontal, and the
resistance line is descending, signifying the possibility of a downward breakout.

3. Symmetrical triangle
For symmetrical triangles, two trend lines start to meet which signifies a breakout in either direction. The support line is drawn with an
upward trend, and the resistance line is drawn with a downward trend. Even though the breakout can happen in either direction, it
often follows the general trend of the market.
4. Pennant
Pennants are represented by two lines that meet at a set point. They are often formed after strong upward or downward moves where
traders pause and the price consolidates, before the trend continues in the same direction.

5. Flag
The flag stock chart pattern is shaped as a sloping rectangle, where the support and resistance lines run parallel until there is a
breakout. The breakout is usually the opposite direction of the trendlines, meaning this is a reversal pattern. Learn more
about breakout stock patterns.
6. Wedge
A wedge pattern represents a tightening price movement between the support and resistance lines, this can be either a rising wedge
or a falling wedge. Unlike the triangle, the wedge doesn’t have a horizontal trend line and is characterised by either two upward trend
lines or two downward trend lines.

For a downward wedge, it is thought that the price will break through the resistance and for an upward wedge, the price is
hypothesised to break through the support. This means the wedge is a reversal pattern as the breakout is opposite to the general trend.

7. Double bottom
A double bottom looks similar to the letter W and indicates when the price has made two unsuccessful attempts at breaking through
the support level. It is a reversal chart pattern as it highlights a trend reversal. After unsuccessfully breaking through the support twice,
the market price shifts towards an uptrend.
8. Double top
Opposite to a double bottom, a double top looks much like the letter M. The trend enters a reversal phase after failing to break through
the resistance level twice. The trend then follows back to the support threshold and starts a downward trend breaking through the
support line.

Read more about trading with double top and bottom patterns.

9. Head and shoulders


The head and shoulders pattern tries to predict a bull to bear market reversal. Characterised by a large peak with two smaller
peaks either side, all three levels fall back to the same support level. The trend is then likely to breakout in a downward motion.
10. Rounding top or bottom
A rounding bottom or cup usually indicates a bullish upward trend, whereas a rounding top usually indicates a bearish downward
trend. Traders can buy at the middle of the U shape, capitalising on the trend that follows as it breaks through the resistance levels.

11. Cup and handle


The cup and handle is a well-known continuation stock chart pattern that signals a bullish market trend. It is the same as the above
rounding bottom, but features a handle after the rounding bottom. The handle resembles a flag or pennant, and once completed, you
can see the market breakout in a bullish upwards trend.
How to use this guide

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