Triple Top Reversal Chart Pattern – Stock Analysis

The market and direct the stock back down to the support level. In this blog, Global Market Astro explains a significant chart pattern observed in day-to-day market charts i.e. Triple Top. These chart patterns serve as a vital tool in making global stock market trend forecasts.

TRIPLE TOP Reversal Chart Pattern

The triple top is a reversal chart pattern formed when a stock attempts to move beneath the key level of support in the direction of existing trend. This chart pattern signals the market’s effort to move a security in a certain direction. After three failure attempts, the buyers lose out hope, making the sellers to send the security in a downtrend.

Triple top is a bearish reversal chart pattern which is formed when a stock trending upward tests a similar level of resistance for three times without breaking the resistance. Every time the stock tests the resistance level, falls again to the similar level of support. After the third fall to the support, the pattern gets completed and the stock falls through the support and the stock price is expected to move downtrend.

The first step of this pattern is the formation of a new high in an uptrend that is slowed down by selling pressure, which forms a resistance level. The selling pressure initiates the stock price to fall until it finds a support level, as buyers involve again into the stock. The buying pressure sends the price once again up to the area of resistance the stock met earlier. Again, the sellers enter

This up-and-down movement gets repeated for the third time; but this time the buyers, after failing three attempts, give up on the stock, and the sellers take over. Upon falling through the support level, the stock is expected to move downtrend.

This pattern can be challenging to spot in the initial stages as it will firstly look like a double-top pattern. The most vital thing here is that one waits for the security price to move above the level of resistance before entering the trade, as the stock could just end up being range-bound, where it trades in between the two levels for some time.

In the triple-top formation, each test of resistance at the upper end should be aided with diminishing volume at each successive peak. And again, when the stock price breaks beneath the support level, it should be accompanied by high volume.

Once the signal is formed, the price objective is based on the chart pattern’s size or the price distance between the level of resistance and support. This is then deducted from the breakout point.

Source : https://www.globalmarketastro.com/blog/triple-top-reversal-chart-pattern/

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Island Reversal Gap Chart pattern - Technical Analysis

Global Market Astro has been explaining the types of gaps observed in the chart patterns used in stock market trend analysis. In this blog we brief about the Island reversal, a type of gap chart pattern.

ISLAND REVERSAL

Island reversal is a commonly observed chart pattern which is formed by a gap followed by a flat trading and then confirmed by another gap in the opposite direction. It is a strong signal of a top or bottom in a trend indicating an upcoming shift in the trend. 

The above is an example of island reversal which occurs at the end of a downtrend. It’s formed when an exhaustion gap appears in a downtrend followed by a flat trading period. The pattern is confirmed when an upward breakaway gap is formed in the price pattern.

The size of the trend reversal or the quality of the signal is dependent on the location of the island in the previous trend. If it happens near the commencement of a trend, then the size of the reversal will likely be less significant.

Source : https://www.globalmarketastro.com/blog/island-reversal-gap-chart-pattern/

Exhaustion Gap Chart Patterns

In this blog Global Market Astro briefs about a significant charts pattern observed in daily stock market charts. We have explained the exhaustion gap with illustrations for easy understanding of stock market charts and in making stock market trend analysis.

EXHAUSTION GAP

It is the last gap formed at the end of a trend and it signals a negative sign that the trend is about to reverse. This generally occurs at the last thrusts of a trend marked as hype or panic and it can also be a point when weaker traders start to move in or out. These exhaustion gaps are usually considered as either “a can’t-miss opportunity” or “avoid at all costs”.

To identify an exhaustion gap or the last large move of the trend, the gap should be marked with huge volume. The strength of the signal also gets increased when it appears after the stock has made a substantial move.

As the exhaustion gap signals a trend reversal, the gap is expected to fill. After the completion of exhaustion gap, the price will move sideways before moving converse to the prior trend. Once the price fills the gap, the pattern gets completed and signals a trend reversal.

Source : https://www.globalmarketastro.com/blog/exhaustion-gap-chart-patterns/

Runway Or Measuring Gap - Chart Pattern

In this blog, Global Market Astro briefs about the runaway gap or measuring gap. The runaway gap is a type of gap chart pattern used in stock market trend forecasts.

RUNAWAY GAP (OR) MEASURING GAP

A runaway gap is found around the middle of a trend, usually when the price has already started a strong move. It is a strong healthy signal as the trend will continue as it indicates continues, even raising, interest in the stock.

Once the security makes a strong move, the traders waiting on the side-line for better entry or exit may decide it not coming and if they wait further, will be missing the trade. This increased buying or selling creates runaway gap and continuation of the trend. Volume is not much important in runaway gap as in breakaway gap, but should be marked with average volume. If the volume is too extreme, it happens to be an exhaustion gap signalling the end of a trend.

The runaway gap forms support or resistance in similar manner as the breakaway gap. Also, the measuring gap does not frequently fill, and there’s cause for concern if the price breaches through the support or resistance, as it is a sign that the trend is weakening – and could even signal that this is an exhaustion gap and not a runaway gap.

source : https://www.globalmarketastro.com/blog/gaps-runway-measuring-gap/

Common and Breakaway Gaps In Charts

Global Market Astro has tried to explain the types of gap chart patterns used in stock market forecasts and in trend analysis in this blog. Let’s stream through the explanation and illustration for Common and breakaway gap chart patterns.

COMMON GAP

The common gap often occurs during the price movement of a security. It is not much significant like other gaps but is always worth to note down. These gaps occur when the security trades in a range and they will be smaller in terms of gap’s price movements. They occur as a result of general events such as low volume trading days or due to an announcement of stock split. These gaps get filled quickly and moves back to the pre-gap price range.

BREAKAWAY GAP

The breakaway gap generally occurs at the beginning of a market move after the security has traded in a consolidation pattern which happens when the price is non-trending within a bound range. It is referred as breakaway gap as it moves the security from a non-trending to a trending pattern.The breakaway gap is a good sign that the new trend has started.

A strong breakaway gap out of a consolidation period is taken to be much stronger than a non-gap move out. The gap indicates a large increase in sentiment in the direction of the gap, which will probably last for some time period, resulting to an extended move.

The strength of this gap and the accuracy levels of its signal can be confirmed by considering the volume during the gap. The larger the volume out of the gap, the more likely the security will continue in the direction of the gap, also reduces the chances of it being filled.

While the breakaway gap generally doesn’t fill like the common gap, it will in some cases. The gap will often provide support or resistance for the resulting move. For an upward breakaway gap, the lowest point of the second candlestick provides support. A downward breakaway gap provides resistance for a move back up at the maximum price in the second candlestick.

source : https://www.globalmarketastro.com/blog/common-and-breakaway-gaps-in-charts/

Chart patterns – Gaps and its types

In this blog, Global Market Astro explains the commonly observed chart pattern- the gap and its types in the upcoming blogs. Hope it gives a greater understanding for  the readers and helps them in making stock market forecasts.

GAP

A gap is an empty space generally occurring in a chart between one trading period and its previous trading period. These gaps usually form as a result of an important and material event that suddenly affects the price of the security such as earnings surprise or a merger agreement.

The gap in price movements are observed in bar and candlestick charts but not on line charts or point and figure charts. This is due to the reason that each and every point is connected in line, point and figure charts

These gaps occur in places where there is large enough variation in the opening price of a trading period where that price and the successive price movements do not fall within the range of the previous trading period. If suppose the price of a stock is trading at $30 and suddenly jumps to $37 in the next trading period, a large gap is formed over there.

There are four major types of gaps

• Common gap
• Breakaway gap
• Runaway gap
• Exhaustion gap
• Island reversal gap

Though these gaps are similar in structure, they differ only by the location in which they occur in the trend and the how they mean to the chartists in stock market trend analysis.

Source : https://www.globalmarketastro.com/blog/chart-patterns-gap-and-its-types/

Rising and Falling Wedges Chart Patterns - Global Market Astro

Global Market Astro takes its privilege in explaining the commonly observed chart pattern i.e. The Wedge in this blog. Hope it gives a greater understanding to the readers and aids them in stock market trend analysis

THE WEDGE

The wedge is a type of chart pattern that signals the reversal of trend which gets formed within the wedge. These wedges serve as a chart pattern tool in stock market forecast. The wedges are similar to that of the Symmetrical triangle chart patterns formed by the support and resistance trend lines. The only way in which they differ from symmetrical triangle is they last for longer periods from three to six months. The trend lines of the wedge generally slant in either upward or downward direction, which makes them differ from the uniform trend lines of the triangles.

TYPES OF WEDGES

Based on the slant pattern of the trend lines, wedges are classified as

1-FALLING WEDGE - sloping downward

2-RISING WEDGE - sloping downward

FALLING WEDGE

The falling wedge is generally a bullish pattern which signals the upward price break through wedge and to move uptrend. The trend lines in this pattern get slanted and converge in downward direction as the price is moving downtrend. Here the price movement bounces between the trend lines, which bound the price movements.

The common thing to look in a falling wedge is that the upper or resistance trend line should exhibit a sharper slope than the lower or support trend line. The flat nature of support trend line shows that the selling pressure has dropped down making it tougher for the sellers to push the price downwards.

The price movement of a wedge should at least test both the support and resistance trend lines twice during the lifetime of a wedge. The more it tests at the resistance level the quality of the wedge is considered to be high.

The buy signal is indicated if the price breaks through upper resistance trend line. This breakout should be at higher volume but due to the long term nature it should be confirmed that the price has successive closes above resistance line.

RISING WEDGE

The rising wedge is a bearish pattern that signals a downward movement in security price. The trend lines of a rising wedge slant and converge in an upward direction. The price movement fluctuates between two trend lines. Once the price moves towards the apex, the momentum weakens. The traders would view for a move below the lower support line for a reversal in uptrend. The sellers start to gain momentum as the buyers’ strength weakens because of the inability of the buyers to take price higher. The pattern gets completed once the sellers take control of the stock when the price falls below support line

Source : https://www.globalmarketastro.com/blog/wedges-rising-and-falling/