1. Bullish Chart Patterns (indicate a potential price increase)
These patterns indicate a higher likelihood of a bullish trend after the formation.
Inverted Head and Shoulders – a reversal pattern indicating a shift from a downtrend to an uptrend.
Double Bottom – a "W" shaped pattern showing strong support and a potential bullish reversal.
Bullish Flag - a consolidation pattern with a slight downward inclination, often leading to a breakout upward.
Triple Bottom – a pattern with three equal bottoms, indicating strong support and a trend reversal.
Cup and Handle – a rounded bottom with a small decline (handle), often indicating a breakout upward.
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2. Indeterminate Chart Patterns (can break in any direction)
These patterns require confirmation as they do not guarantee a specific movement.
Symmetrical Triangle - a neutral pattern where the price converges, with the possibility of breaking in either direction.
Falling Narrow Wedge – usually a bullish pattern, but requires confirmation of the breakout.
Rising Narrow Wedge - usually bearish, but it can also break upward in rare cases.
Falling Triangle - usually bearish but can break upward if there is strong buying pressure.
Rising Triangle - usually bullish but may break down if sellers dominate.
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3. Bearish Chart Patterns (indicate a potential price decrease)
These patterns indicate a bearish trend following the formation.
Head and Shoulders – a reversal pattern indicating a transition from an uptrend to a downtrend.
Triple Top – a pattern with three equal tops, indicating strong resistance and a potential decline.
Double Top – an "M" shaped pattern showing resistance and a potential bearish reversal.
Bearish Flag – a consolidation pattern with an upward inclination, often leading to a downward breakout.
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Key Points:
Bullish patterns indicate buying opportunities.
Bearish patterns indicate potential selling pressure.
Indeterminate patterns require confirmation before making trading decisions.