Chart Patterns

I'm going to cover the major patterns that you will see a lot and the patterns that are very reliable.

Double bottom/top- Is just that, the security hits a support or resistance point and bounces off of it, then later tests that same point and doesn't break it. Most of the time it will break it slightly (as shown in the picture) this is to shake people out who set a stop loss order at that point. (a double top is just the inverse)

Cup (w/handle)- This can form with or without a handle. This is the most reliable breakout, A stock usually goes much higher when coming off of this formation. (sorry, I threw this one together quick.)

Stair stepping- Is exactly what it sounds like, the chart looks like it is a set of stairs. This can be up or down (pic to come).

Bull/Bear Flag- The handle on the cup is a bull flag. The security makes a big run (or drop for bear) then pulls back (or bounces for bear). The buy point is when it clears that initial high. (pic to come).

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