What is a Fibonacci Retracement?
Fibonacci retracement is a tool that helps user (Trader/Investor) to find the areas of support and resistance of the stock’s price. It is also used to find the Target & Stop loss of the stocks.
Continue reading “The Series of Technical Analysis Tools Chapter 2: “Fibonacci Retracement””
What is a Trend line?
A trend line is a straight line that connects two or more price points, and then extends into the future to act as a line of support or resistance. As its name implies, it helps traders recognize the trends to decide if the market is bullish or bearish.
Continue reading “The Series of Technical Analysis Tools Chapter 1: “Trend Line””
They are technical chart formations that indicate if the stock’s price has reached its low and that the downtrend has come to a close. When it is graphed, it forms a U Shape. As the name suggests, they resemble the silhouette of shallow dishes or saucers.
Continue reading “The Series of Chart Patterns Chapter 17: “Saucers””
What are Rounding Top?
The “rounding top” is a reversal chart pattern that develops after a price incline. When it is graphed, it forms an inverted U Shape. Rounding tops are found at the end of extended uptrend trends and signify a reversal in long-term price movements.
Continue reading “The Series of Chart Patterns Chapter 16: “Rounding Top””
What is Rounding Bottom?
The rounding bottom is a reversal chart pattern, which develops after a price decline. When it is graphed, it forms a U Shape. Rounding bottoms are found at the end of extended downward trends and signify a reversal in long-term price movements.
Continue reading “The Series of Chart Patterns Chapter 15: “Rounding Bottom”
What is Cup & Handle chart pattern?
A Cup and Handle can be used as an entry pattern for the continuation of an established bullish trend. It´s one of the easiest patterns to identify. The cup has a soft U-shape, retraces the prior move for about ⅓ and looks like a bowl. After forming the cup, price pulls back to about ⅓ of the cups advance, forming the handle. The full pattern is complete when price breaks out of this consolidation in the direction of the cups advance.
Continue reading “The Series of Chart Patterns Chapter 14: “Cup & Handle””
What are Gaps?
Gaps occur when there is an empty space between two trading periods that are caused by a significant increase/decrease in price; i.e. current open is not the same as prior closing price. E.g. A stock might close at INR 500 and open at INR 510 after positive earnings. This is called as Gap-up. There are three main types of Gaps: 1) Break away 2) Run away 3) Exhaustion
Continue reading “The Series of Chart Patterns Chapter 13: “Gaps””
What is Flag chart pattern?
Pennants are chart patterns, formed by price action, that is contained within a small symmetrical triangle. This is created when there’s a minor profit booking, in either an uptrend or a downtrend.
Continue reading “The Series of Chart Patterns Chapter 12: “Pennant Pattern””
What is Flag chart pattern?
A flag pattern is a trend continuation pattern, appropriately named after its visual similarity to a flag on a flagpole. It is formed by price action, which is contained within a small rectangle or a parallelogram. This is created when there is a minor profit booking in either an uptrend or a downtrend.
Continue reading “The Series of Chart Patterns Chapter 11: “Flag Pattern””
What is Triple Top chart pattern?
Triple Bottom is a pattern used to predict the reversal of a prolonged uptrend. A triple Top pattern shows 3 different small tops near the similar amount. The triple top is regarded to be a difference of the head and shoulders top. There are three equal highs followed by a break above resistance.
Continue reading “The Series of Chart Patterns Chapter 10: “Triple Top””