Chart Patterns

Two Patterns You Never Heard of: Throwbacks and Pullbacks

By Thomas N. Bulkowski Throwbacks and pullbacks are not new to securities, but if you don’t understand how price behaves, a losing trade may result. Figure 1 shows an example of a throwback. Price forms a symmetrical triangle by bumping up against overhead resistance highlighted by a down-slopin

Ascending Triangle

The ascending triangle is a bullish chart pattern. The triangle is formed by two converging trendlines, where the lower line is rising and the upper line is flat. The price breaking through the horizontal resistance level depicted by the flat trendline is considered a buy signal.

Ascending Trend Channel

A channel formed using two parallel, upward trendlines as the borders. The upper trendline connects chart highs, the lower trendline connects the chart lows.

Area Pattern

A price movement pattern that follows an interupted upward or downward move in a stock or commodity. These patterns, including Head and Shoulders, Triangles, Pennants, Flags, Wedges, and Broadening Formations, have predictive value.

Chart Pattern Review

Head and Shoulders Pattern In technical analysis, a chart formation that resembles a human head and shoulders and is generally considered to be predictive of a price reversal. Double Top Pattern A technical analysis term for a chart pattern displaying two prominent peaks, where price has risen to th

Island Reversal

A reversal chart pattern that occurs when a security gaps up (or down), then trades higher (or lower) that the gap for a while, and then gaps down (or up) below the initial price.

Double Top

A technical analysis term for a chart pattern displaying two prominent peaks, where price has risen to the same price level twice. This price level is considered to constitute resistance. The opposite of double bottom.

Double Bottom

The Double Bottom is a reveral chart pattern that occurs when, during a downtrend, the market makes two lows at the same level. The first trough marks the low of the prior downtrend. This low is followed by an advance of typically 10-20%. The price then retraces back to the low where it finds suppor

Descending Triangle

A sideways chart pattern where two price trendlines, the bottom one horizontal and the top one sloping down, form a triangle pattern. The Descending Triangle is interpreted as a bearish signal. See also: Ascending Triangle

Advance Block

Advance Block is a three candlestick bearish reversal pattern that occurs during an uptrend.  The pattern consists of a succession of three white candlesticks. The first candle is long bodied with a relatively short wick. The second and third candles open within the body of the prior candle.  They