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Notes

This document describes several common chart patterns in stock prices, including cup and handle, double bottom, flat base, high tight flags, base on top of base, and ascending base. It provides characteristics for each pattern such as typical price movements, time frames, and buy points to look for when identifying these patterns.

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Gohan
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47 views2 pages

Notes

This document describes several common chart patterns in stock prices, including cup and handle, double bottom, flat base, high tight flags, base on top of base, and ascending base. It provides characteristics for each pattern such as typical price movements, time frames, and buy points to look for when identifying these patterns.

Uploaded by

Gohan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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CUP N HANDLE

 Cup can last from 3-6 months


 The correction from peak 12-15 % up to 33% in cup (more than this would mostly lead to a
failure after moving 5-15% they will fall down)
 Prior uptrend necessary of at least 30% along with improving rs and increasing volume
inflections during that point
 U instead of V
 There must be shakeout in the handle formed usually near the end of the correction along with
low volumes and must be above 10-week ma
 Handles that consistently wedge up along their lows have a higher probability of failing
 A price drop in handle must be contained within 12-15% of its peak (can be more than that if
market in a shakeout phase in ending of a bear market)
 Look for tight week closes along the base
 Buy point is peak of handle

DOUBLE BOTTOM

 The second bottom must undercut the first bottom to shakeout weak holders.
 Depth and horizontal length same as cup h handle(12-15% and 33%)
 Buy point is high of first up move
 Sometimes double bottom may have a handle and, in that case, the peak price of that handle is
the buy point

FLAT BASE

 Stock moves in a tight range of 10-15% for at least 5-6 weeks

HIGH TIGHT FLAGS

 Very rare. Strongest of patterns


 Begins with the stock moving 100% generally in a very short time (4-8 weeks) and then
correcting no more than 10-25% sideways (3-5weeks)
BASE ON TOP OF BASE

 A powerful stock breaks out of its base and advances but it unable to extend to 20-30% because
the general market begins another leg down. Due to this it starts consolidating.
 Such stocks are the first leaders which act as spring as soon as the new bull market starts.

ASCENDING BASE

 Occurs after a stock is on its way up. They have 3 pullbacks from 10-20% with each low point
during the sell off in price being higher than the previous one. These pullbacks occur due to
general market decline or pullback in market.

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