Support is a price level where an asset tends to stop falling due to increased buying. Resistance is where the price tends to stop rising due to selling pressure. These levels help traders predict price movements and potential trend reversals. Breaking support or resistance often signals a change in the market trend.
View module advantagesHead and Shoulders Pattern consists of three peaks: a higher middle peak (head) flanked by two lower peaks (shoulders). It signals a trend reversal, with the neckline serving as a critical support level. A breakdown below the neckline indicates a bearish trend. The inverse pattern suggests a bullish reversal.
View moduleThe Double Top pattern forms after an uptrend, indicating a potential bearish reversal with two peaks at a similar level, signaling resistance. A price break below the neckline confirms the reversal. Conversely, the Double Bottom pattern occurs after a downtrend, signaling a bullish reversal with two troughs at a similar support level. A breakout above the neckline confirms upward momentum.
View moduleThe Triangle Pattern is a continuation pattern that indicates consolidation before the price resumes its previous trend. It comes in three forms: ascending (bullish bias), descending (bearish bias), and symmetrical (neutral). As the price converges toward the apex, a breakout usually follows, signaling the next potential move. Traders monitor for breakouts to confirm the direction and enter positions accordingly.
View moduleFlags and Pennants are short-term continuation patterns that signal a brief consolidation before the prevailing trend resumes. Flags appear as small, parallel channels, while pennants are small, converging triangles. Both patterns typically follow a sharp price movement, known as the "flagpole." A breakout in the direction of the prior trend confirms the continuation, offering potential trading opportunities.
View moduleWedges are converging patterns indicating potential trend reversals. A rising wedge signals a bearish shift, while a falling wedge suggests a bullish reversal. The pattern reflects declining momentum, with breakouts confirming trend changes. Volume analysis supports the validity of the breakout.
View moduleRectangle patterns are chart formations where price oscillates between horizontal support and resistance levels, creating a rectangular shape. This consolidation phase indicates equilibrium between supply and demand. The pattern signals a pause before a potential breakout, with parallel lines marking the highs and lows.
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