HAVE A GREAT WEDNESDAY

ANALYZING CHART PATTERNS: THE WEDGE  

The wedge chart pattern signals a reverse of the trend that is currently formed within the wedge itself. Wedges are similar in construction to a symmetrical triangle in that there are two trendlines - support and resistance - which band the price of a security.

The wedge pattern differs in that it is generally a longer-term pattern, usually lasting three to six months. It also has converging trendlines that slant in an either upward or downward direction, which differs from the more uniform trendlines of triangles.

There are two main types of wedges – falling and rising – which differ on the overall slant of the pattern. A falling wedge slopes downward, while a rising wedge slants upward.

Falling Wedge

The falling wedge is a generally bullish pattern signaling that one will likely see the price break upwards through the wedge and move into an uptrend. The trendlines of this pattern converge, with both being slanted in a downward direction as the price is trading in a downtrend.

Falling wedge pattern

From the above, one can see that a wedge is similar to the triangles, in that the price movement bounces between the two trendlines, which are bounding the price movement.

Another thing to look at in the falling wedge is that the upper (or resistance) trendline should have a sharper slope than the support level in the wedge construction. When the lower (or support) trendline is clearly flatter as the pattern forms, it signals that selling pressure is waning, as sellers have trouble pushing the price down further each time the security is under pressure.

The price movement in the wedge should at minimum test both the support trendline and the resistance trendline twice during the life of the wedge. The more times it tests each level, especially on the resistance end, the higher quality the wedge pattern is thought to be.

The buy signal is formed when the price breaks through the upper resistance line. This breakout move should be on heavier volume, but due to the longer-term nature of this pattern, it's important that the price has successive closes above the resistance line.

Rising Wedge

Conversely, a rising wedge is a bearish pattern that signals that the security is likely to head in a downward direction. The trendlines of this pattern converge, with both trendlines slanted in an upward direction.

Rising wedge pattern

Again, the price movement is bounded by the two converging trendlines. As the price moves towards the apex of the pattern, momentum is weakening. A move below the lower support would be viewed by traders as a reversal in the upward trend.

As the strength of the buyers weakens (exhibited by their inability to take the price higher), the sellers start to gain momentum. The pattern is complete, with the sellers taking control of the security, when the price falls below the supporting trendline.

NIFTY FUTURES UPDATE & TODAY'S FUNDAMENTALS (DEC 31)

Do you all notice it guys………??

Yesterday Nifty Futures, ppppperfectly after having traded 

below the level of 8331 for 60 minutes, 

reached our second target pf 8286 like a rocket 

in the high noon session.

And managed to have a close at 8325

Again we remind you……………

BEWARE of three more gaps pending 

below current levels

One @ 8060; Second @ 7947 

and the third @ 7818)

Below all these there exists another gap @ 7612 too

If opened & trades above 8322 for 30 minutes 

it would hit 8338-43

Suppose if cuts and trades below 8321 for 30 minutes 

see a fall upto 8300 - 8295

INTRADAY RESISTANCES @ 8340-50

INTRADAY SUPPORTS   @ 8295

Trade very carefully with the above mentioned time and levels.

ALL THE VERY BEST

(By the time this post was updated 

S&P CNX Nifty Futures was trading @ 8333)

இன்றைய சந்தை அடிப்படை (DEC 31)

இந்தியநேரப்படி இன்று காலை 7:15 மணிக்கு சீன நாணயத்தை பாதிக்கும்படி வெளியாகும் HSBC Manufacturing PMI தகவல் இந்திய சந்தையின் ஆரம்பத்தில் சிறு தாக்கத்தைக் கொடுக்கும்!

மாலை 4:00 மணிக்கும் ஐந்து மணிக்கும் முறையே வெளிவரவிருக்கும் நவம்பர் மாதத்து Federal Fiscal Deficit

மற்றும் Foreign Debt (USD) டாலருக்கு எதிரான இந்திய ரூபாயை வலுவாக பாதிக்கவல்லது!

450.1 பில்லியன் டாலராக இருந்த கடன் இம்முறை குறைந்து வெளியாகுமானால் அமெரிக்க டாலருக்கு எதிரான ரூபாயின் மதிப்பு வலுப்பெறும்..அல்லாமல் போனால் வீழும்!

அதே சமயம் இரவு 8:30 மணிக்கு வெளியாகும் அமெரிக்காவின் மீத வீட்டு விற்பனை மற்றும் ஒன்பது மணிக்கு வெளியாகும் கச்சா எண்ணெய் மற்றும் காசோலீன் கையிருப்புகள் போன்ற தகவல்கள் டாலர் குறியீட்டை நேரடியாக பாதிக்கும் சக்தி படைத்தது!

ஆக இன்று கச்சா எண்ணெய், தங்கம், வெள்ளி, காப்பர், நிக்கல் மற்றும் இயற்கை எரிவாயு (Natural Gas) போன்ற கமாடிட்டிகளிலும்  கவனமாக இருக்க வேண்டிய நேரம்...

10:00 – 10:40 AM;  4:00 – 4:30 PM; 

5:00 – 5:30 PM;  8:25 – 9:30 PM

வெல்க அன்பு நெஞ்சங்களே!  

DISCLAIMER 

THE RECOMMENDATIONS MADE HERE DO NOT CONSTITUTE AND OFFER TO SELL OF A SOLICITATION TO BUY ANY OF THE SECURITIES/COMMODITIES OF ANY OTHER INSTRUMENTS WHATSOEVER MENTIONED. NO REPRESENTATIONS CAN BE MADE THAT THE RECOMMENDATIONS CONTAINED WILL BE PROFITABLE OF THAT THEY WILL NOT RESULT IN LOSSES. READERS USING THE INFORMATION CONTAINED HEREIN ARE SOLELY RESPONSIBLE FOR THEIR ACTIONS. SURFING OR USING ‘tradersharmony.blogspot.com' DEEMS THAT THE SURFER ACCEPTS AND ACKNOWLEDGES THE DISCLAIMERS AND DISCLOSURES.THE INFORMATION PUBLISHED ARE FOR EDUCATIONAL AND INFORMATIVE PURPOSE ONLY AND THE USER/READERS SHOULD TAKE ADVICE OF HIS/HER ADVISER BEFORE TAKING ANY DECISION FOR BUYING, SELLING OR OTHERWISE DEALING WITH SECURITIES/COMMODITIES OR ANY OTHER INSTRUMENT WHATSOEVER.

கச்சா எண்ணெய் - ஒரு வரைபடப் பார்வை

கச்சா எண்ணெய் - மாத வரைபடம் 

வரைபடத்தில் நீங்கள் காண்பது கச்சா எண்ணெய் தற்போது தனது நான்கு வருடத்திற்கு முந்தைய குறைந்த பட்ச விலையைக் கடந்து வர்த்தகமாகிக் கொண்டிருக்கும் ஓர் நிலையை..!

அதாவது 2009 ஜூலை மாதம் ஏழாம் தேதி பதிவான ஒரு குறைந்த பட்ச அளவு என்பது 58.32 $ ஆகும்!

அதைக் கடந்து தற்போது 53.53 என்ற நிலையில் வர்த்தகமாகிக் கொண்டிருக்கிறது கச்சா எண்ணெய்!

இனி 2008 ஆம் ஆண்டு டிசம்பர் மாதம் பதிவாகியிருக்கும் LOW வான (32.40$) ஒன்றே முக்கியமான ஆதரவு நிலையாக செயல்படும்...!

முன்னதாக 47.24$ ------- 43.53 $ போன்றவை மிதமான ஆதரவு நிலையாக செயல்படக்கூடும்!

அல்லாது போனால் கச்சா எண்ணெய் TIME THEORYஇன் படி அந்த ஐந்து வருட முந்தைய விலையை அடுத்த ஆண்டு தொடும்!

பொறுத்திருப்போம்!

DISCLAIMER 

THE RECOMMENDATIONS MADE HERE DO NOT CONSTITUTE AND OFFER TO SELL OF A SOLICITATION TO BUY ANY OF THE SECURITIES/COMMODITIES OF ANY OTHER INSTRUMENTS WHATSOEVER MENTIONED. NO REPRESENTATIONS CAN BE MADE THAT THE RECOMMENDATIONS CONTAINED WILL BE PROFITABLE OF THAT THEY WILL NOT RESULT IN LOSSES. READERS USING THE INFORMATION CONTAINED HEREIN ARE SOLELY RESPONSIBLE FOR THEIR ACTIONS. SURFING OR USING ‘tradersharmony.blogspot.com' DEEMS THAT THE SURFER ACCEPTS AND ACKNOWLEDGES THE DISCLAIMERS AND DISCLOSURES.THE INFORMATION PUBLISHED ARE FOR EDUCATIONAL AND INFORMATIVE PURPOSE ONLY AND THE USER/READERS SHOULD TAKE ADVICE OF HIS/HER ADVISER BEFORE TAKING ANY DECISION FOR BUYING, SELLING OR OTHERWISE DEALING WITH SECURITIES/COMMODITIES OR ANY OTHER INSTRUMENT WHATSOEVER.

HAVE A WONDERFUL TUESDAY

ANALYZING CHART PATTERNS: FLAGS AND PENNANTS

The flag and pennant patterns are two continuation patterns that closely resemble each other, differing only in their shape during the pattern's consolidation period. This is the reason the terms flag and pennant are often used interchangeably. A flag is a rectangular shape, while the pennant looks more like a triangle.

These two patterns are formed when there is a sharp price movement followed by generally sideways price movement, which is the flag or pennant. The pattern is complete when there is a price breakout in the same direction of the initial sharp price movement. The following move will see a similarly sharp move in the same direction as the prior sharp move. The complete move of the chart pattern - from the first sharp move to the last sharp move - is referred to as the flag pole.

The flag or pennant is considered to be flying at half-mast, as the distance of the initial price movement is thought to be roughly equal to the proceeding price move. The reason these patterns form is that after a large price movement, the market consolidates, or pauses, before resuming the initial trend.

The Flag

The flag pattern forms what looks like a rectangle. The rectangle is formed by two parallel trendlines that act as support and resistance for the price until the price breaks out. In general, the flag will not be perfectly flat but will have its trendlines sloping.

The flag pattern

In general, the slope of the flag should move in the opposite direction of the initial sharp price movement; so if the initial movement were up, the flag should be downward sloping.

The buy or sell signal is formed once the price breaks through the support or resistance level, with the trend continuing in the prior direction. This breakthrough should be on heavier volume to improve the signal of the chart pattern.

The Pennant

The pennant forms what looks like a symmetrical triangle, where the support and resistance trendlines converge towards each other. The pennant pattern does not need to follow the same rules found in triangles, where they should test each support or resistance line several times. Also, the direction of the pennant is not as important as it is in the flag; however, the pennant is generally flat.

The Pennant

General Ideas

While the construct of the pause in the trend is different for the flag and pennant, the attributes of the chart patterns themselves are similar. It is vital that the price movement prior to the flag or pennant be a strong, sharp move.

Typically, these patterns take less time to form during downtrends than in uptrends. In terms of pattern length, they are generally short-term patterns lasting one to three weeks, but can be formed over longer periods.

The volume, as with most breakout signals, should be seen as strong during the breakout to confirm the signal. Upon breakout, the initial price objective is equal to the distance of the prior move added to the breakout point. For example, if a prior sharp up movement was from Rs 30 to Rs 40, then the resulting price objective from a price breakout of Rs 38 would be Rs 48 (Rs38+Rs10).

NIFTY FUTURES UPDATES (DEC 30)

Yesterday Nifty Futures jumped all the targets in the first fifteen minutes to register a high of 8356 and a low of 8305 

and closed @ 8314

Again we remind you……………

BEWARE of three more gaps pending below current levels

One @ 8060; Second @ 7947 and the

third @ 7818)

Below all these there exists another gap @ 7612

Today Nifty futures is having strong resistance @ 8352-62

If opened & trades above 8332 for 30 minutes 

it would hit 8350-55

Suppose if opened normal and trades below 

8331 for 60 minutes it reaches 8300 - 8286

INTRADAY RESISTANCES @ 8352-62

INTRADAY SUPPORTS   @ 8285

Trade very carefully with the above mentioned time and levels.

ALL THE VERY BEST

(By the time this post was updated 

S&P CNX Nifty Futures was trading @ 8328 )

DISCLAIMER 

THE RECOMMENDATIONS MADE HERE DO NOT CONSTITUTE AND OFFER TO SELL OF A SOLICITATION TO BUY ANY OF THE SECURITIES/COMMODITIES OF ANY OTHER INSTRUMENTS WHATSOEVER MENTIONED. NO REPRESENTATIONS CAN BE MADE THAT THE RECOMMENDATIONS CONTAINED WILL BE PROFITABLE OF THAT THEY WILL NOT RESULT IN LOSSES. READERS USING THE INFORMATION CONTAINED HEREIN ARE SOLELY RESPONSIBLE FOR THEIR ACTIONS. SURFING OR USING ‘tradersharmony.blogspot.com' DEEMS THAT THE SURFER ACCEPTS AND ACKNOWLEDGES THE DISCLAIMERS AND DISCLOSURES.THE INFORMATION PUBLISHED ARE FOR EDUCATIONAL AND INFORMATIVE PURPOSE ONLY AND THE USER/READERS SHOULD TAKE ADVICE OF HIS/HER ADVISER BEFORE TAKING ANY DECISION FOR BUYING, SELLING OR OTHERWISE DEALING WITH SECURITIES/COMMODITIES OR ANY OTHER INSTRUMENT WHATSOEVER.

HAVE A GREAT MONDAY

ANALYZING CHART PATTERNS: TRIANGLES

As you may have noticed, chart pattern names don't leave much to the imagination. This is no different for the triangle patterns, which clearly form the shape of a triangle. The basic construct of this chart pattern is the convergence of two trendlines - flat, ascending or descending - with the price of the security moving between the two trendlines.

There are three types of triangles, which vary in construct and significance: 

the symmetrical triangle, the descending triangle and the ascending triangle.

Symmetrical triangle

The symmetrical triangle is mainly considered to be a continuation pattern that signals a period of consolidation in a trend followed by a resumption of the prior trend. It is formed by the convergence of a descending resistance line and an ascending support line. The two trendlines in the formation of this triangle should have a similar slope converging at a point known as the apex. The price of the security will bounce between these trendlines, towards the apex, and typically breakout in the direction of the prior trend.

If preceded by a downward trend, the focus should be on a break below the ascending support line. If preceded by an upward trend, look for a break above the descending resistance line. However, this pattern doesn't always lead to a continuation of the previous trend. A break in the opposite direction of the prior trend should signal the formation of a new trend.

Figure 1: Symmetrical triangle

Above is an example of a symmetrical triangle that is preceded by an upward trend. The first part of this pattern is the creation of a high in the upward trend, which is followed by a sell-off to a low. The price then moves to another high that is lower than the first high and again sells off to a low, which is higher than the previous low. At this point the trendlines can be drawn, which creates the apex. The price will continue to move between these lines until breakout.

The pattern is complete when the price breaks out of the triangle - look for an increase in volume in the direction of the breakout. This pattern is also susceptible to a return to the previous support or resistance line that it just broke through, so make sure to watch for this level to hold if it does indeed break out.

Ascending Triangle

The ascending triangle is a bullish pattern, which gives an indication that the price of the security is headed higher upon completion. The pattern is formed by two trendlines: a flat trendline being a point of resistance and an ascending trendline acting as a price support.

The price of the security moves between these trendlines until it eventually breaks out to the upside. This pattern will typically be preceded by an upward trend, which makes it a continuation pattern; however, it can be found during a downtrend.

Figure 2: Ascending triangle

As seen above, the price moves to a high that faces resistance leading to a sell-off to a low. This follows another move higher, which tests the previous level of resistance. Upon failing to move past this level of resistance, the security again sells off - but to a higher low. This continues until the price moves above the level of resistance or the pattern fails.

The most telling part of this pattern is the ascending support line, which gives an indication that sellers are starting to leave the security. After the sellers are knocked out of the market, the buyers can take the price past the resistance level and resume the upward trend.

The pattern is complete upon breakout above the resistance level, but it can fall below the support line (thus breaking the pattern), so be careful when entering prior to breakout.

Descending triangle

The descending triangle is the opposite of the ascending triangle in that it gives a bearish signal to chartists, suggesting that the price will trend downward upon completion of the pattern. The descending triangle is constructed with a flat support line and a downward-sloping resistance line.

Similar to the ascending triangle, this pattern is generally considered to be a continuation pattern, as it is preceded by a downward trendline. But again, it can be found in an uptrend.

Figure 3: Descending triangle

The first part of this pattern is the fall to a low that then finds a level of support, which sends the price to a high. The next move is a second test of the previous support level, which again sends the stock higher - but this time to a lower level than the previous move higher. This is repeated until the price is unable to hold the support level and falls below, resuming the downtrend.

This pattern indicates that buyers are trying to take the security higher, but continue to face resistance. After several attempts to push the stock higher, the buyers fade and the sellers overpower them, which sends the price lower. 

NIFTY FUTURES UPDATES (DEC 29)

Dear friends,

Levels of Nifty Futures updated every day here 

in early market hours rocks as you all watch.

Moreover we have been warning (from the peak of Nifty) 

about all the GAPS to be filled under current levels when all the sites and speculations are looking for more upper side targets.

Again we remind you ……………

BEWARE of three more gaps pending below current levels

One @ 8060; Second @ 7947 

and the third one @ 7818)

Below all these there exists another gap @ 7612

Today Nifty futures is having strong resistance @ 8282

If trades above 8282 for 30 minutes, it would hit 8303 – 13

Suppose if opened and trades below 

8275 for 30 minutes it reaches 8250

INTRADAY RESISTANCES @ 8282– 8315

INTRADAY SUPPORTS   @ 8248 – 40

Trade very carefully with the above mentioned time and levels.

ALL THE VERY BEST

(By the time this post was updated 

S&P CNX Nifty Futures was trading @ 8298)

DISCLAIMER 

THE RECOMMENDATIONS MADE HERE DO NOT CONSTITUTE AND OFFER TO SELL OF A SOLICITATION TO BUY ANY OF THE SECURITIES/COMMODITIES OF ANY OTHER INSTRUMENTS WHATSOEVER MENTIONED. NO REPRESENTATIONS CAN BE MADE THAT THE RECOMMENDATIONS CONTAINED WILL BE PROFITABLE OF THAT THEY WILL NOT RESULT IN LOSSES. READERS USING THE INFORMATION CONTAINED HEREIN ARE SOLELY RESPONSIBLE FOR THEIR ACTIONS. SURFING OR USING ‘tradersharmony.blogspot.com' DEEMS THAT THE SURFER ACCEPTS AND ACKNOWLEDGES THE DISCLAIMERS AND DISCLOSURES.THE INFORMATION PUBLISHED ARE FOR EDUCATIONAL AND INFORMATIVE PURPOSE ONLY AND THE USER/READERS SHOULD TAKE ADVICE OF HIS/HER ADVISER BEFORE TAKING ANY DECISION FOR BUYING, SELLING OR OTHERWISE DEALING WITH SECURITIES/COMMODITIES OR ANY OTHER INSTRUMENT WHATSOEVER.

RUSH TO GRAB YOUR COPY FRIENDS..!

AN INTRADAY SUCCESS UPDATE (DEC 26)

A SWIFT TRADE WITHIN 15 MINUTES 

IN NATURAL GAS 

USING 'MID TECHNIQUE' JUST NOW....

A Net Profit of Rs 5500 [6500-1000(Brokerage + Tax)] 

CONTACT 9788563656 TO LEARN THE SECRET 

& WIN IN MARKET

HAVE AN ENCHANTING WEEKEND

ANALYZING CHART PATTERNS: DOUBLE BOTTOM

Double Bottom

This is the opposite chart pattern of the double top as it signals a reversal of the downtrend into an uptrend. This pattern will closely resemble the shape of a "W".

Double-bottom pattern

The double bottom is formed when a downtrend sets a new low in the price movement. This downward move will find support, which prevents the security from moving lower. Upon finding support, the security will rally to a new high, which forms the security's resistance point. The next stage of this pattern is another sell-off that takes the security down to the previous low. These two support tests form the two bottoms in the chart pattern. But again, the security finds support and heads back up. The pattern is confirmed when the price moves above the resistance the security faced on the prior move up.

Remember that the security needs to break through the support line to signal a reversal in the downward trend and should be done on higher volume. As in the double top, do not be surprised if the price returns to the breakout point to test the new support level in the upward trend.

Price Objective and Adjustments

It's important to get an idea as to the size of the resulting move once the signal has been formed. In both the double top and double bottom, the initial price objective can be measured by taking the price distance between the support and resistance levels or the range that chart pattern trades.

Often in technical analysis and chart patterns, we're presented with an ideal chart setup; but in reality the pattern doesn't always look as perfect as it's supposed to. In double tops and double bottoms one thing to remember is that the price on the second test does not always need to reach the same distance as the first test.

Another problem that can occur is the second testing point, where the top or bottom actually breaks the level that the first top or bottom test created. If this occurs, it can give a signal that the previous trend will continue - instead of reverse - as the pattern suggests. However, don't be too quick to abandon the pattern as it could still materialize.

If the price does, in fact, move above the prior test, look to see if the move was accompanied by large volume, suggesting a trend continuation. For example, if on the second test of a double bottom the price falls below the support line on heavy volume, it is a good sign the downward trend will continue and not reverse. If the volume is very weak, it could just be a last attempt to continue the downward trend, but the trend will ultimately reverse.

The double tops and double bottoms are strong reversal patterns that can provide trading opportunities. But it is important to be careful with these patterns as the price can often move either way. Consequently, it's important that the trade is implemented once the support/resistance line is broken.

NIFTY FUTURES UPDATE (DEC 26)

On Wednesday, as perfectly predicted early market hours

Nifty Futures after having traded below our mentioned level of 8272 for 30 minutes, within few minutes reached the downside target of 8224 and even more to fill the (first downside) 

GAP @ 8180

BEWARE of three more gaps pending below the current levels

One @ 8060; Second @ 7947 and the third @ 7818)

Each & every day we have been warning this..! 

(Day before) yesterday one GAP was filled.

Below all these there exists another gap @ 7612

Today if opened & trades above 8184 for 30 minutes

It would hit 8213

And above 8217 it should sustain atleast for 30 minutes

to have an hike upto 8237-44

Otherwise in a normal opening if opens & trades below

8193 for 30 minutes and cuts 8183 see a slide upto 8165 - 48

INTRADAY RESISTANCES @ 8218 – 8238-45

INTRADAY SUPPORTS   @ 8165 – 47

Trade very carefully with the above mentioned time and levels.

ALL THE VERY BEST

(By the time this post was updated 

S&P CNX Nifty Futures was trading @ 8292 )

DISCLAIMER 

THE RECOMMENDATIONS MADE HERE DO NOT CONSTITUTE AND OFFER TO SELL OF A SOLICITATION TO BUY ANY OF THE SECURITIES/COMMODITIES OF ANY OTHER INSTRUMENTS WHATSOEVER MENTIONED. NO REPRESENTATIONS CAN BE MADE THAT THE RECOMMENDATIONS CONTAINED WILL BE PROFITABLE OF THAT THEY WILL NOT RESULT IN LOSSES. READERS USING THE INFORMATION CONTAINED HEREIN ARE SOLELY RESPONSIBLE FOR THEIR ACTIONS. SURFING OR USING ‘tradersharmony.blogspot.com' DEEMS THAT THE SURFER ACCEPTS AND ACKNOWLEDGES THE DISCLAIMERS AND DISCLOSURES.THE INFORMATION PUBLISHED ARE FOR EDUCATIONAL AND INFORMATIVE PURPOSE ONLY AND THE USER/READERS SHOULD TAKE ADVICE OF HIS/HER ADVISER BEFORE TAKING ANY DECISION FOR BUYING, SELLING OR OTHERWISE DEALING WITH SECURITIES/COMMODITIES OR ANY OTHER INSTRUMENT WHATSOEVER.

HAVE A FANTABULOUS WEDNESDAY

ANALYZING CHART PATTERNS: DOUBLE TOP

The double top and double bottom are another pair of well-known chart patterns whose names don't leave much to the imagination. These two reversal patterns illustrate a security's attempt to continue an existing trend. Upon several attempts to move higher, the trend is reversed and a new trend begins. These chart patterns formed will often resemble what looks like a "W" (for a double bottom) or an "M" (double top).

Double Top

The double-top pattern is found at the peaks of an upward trend and is a clear signal that the preceding upward trend is weakening and that buyers are losing interest. Upon completion of this pattern, the trend is considered to be reversed and the security is expected to move lower.

The first stage of this pattern is the creation of a new high during the upward trend, which, after peaking, faces resistance and sells off to a level of support. The next stage of this pattern will see the price start to move back towards the level of resistance found in the previous run-up, which again sells off back to the support level. The pattern is completed when the security falls below (or breaks down) the support level that had backstopped each move the security made, thus marking the beginnings of a downward trend.

Figure : Double-top pattern

It's important to note that the price does not need to touch the level of resistance but should be close to the prior peak. Also, when using this chart pattern one should wait for the price to break below the key level of support before entering. Trading before the signal is formed can yield disastrous results, as the pattern is only setting up the possibility for the trend reversal and could trade within this banded range for some time without falling through.

This pattern is a clear illustration of a battle between buyers and sellers. The buyers are attempting to push the security but are facing resistance, which prevents the continuation of the upward trend. After this goes on a couple of times, the buyers in the market start to give up or dry up, and the sellers start to take a stranglehold of the security, sending it down into a new downtrend.

Again, volume should be an important focus as one should look for an increase in volume when the security falls below the support level. Also, as in other chart patterns, do not be alarmed if there is a return to the previous support level that has now become a resistance level in the newly established trend.