Chart_Patterns in Technical Analysis Presentation.pptx

Chart Patterns, which are important tools in technical analysis. Chart patterns help us understand the price movements of stocks and predict future trends. These patterns are divided into three categories: Support & Resistance, Reversal Patterns, and Continuation Patterns.

1. Security Analysis and Portfolio Management CHART PATTERNS IN TECHNICAL ANALYSIS SUBMITTED TO DR. SHEENA DAS ASST. PROFESSOR DEPT. OF COMMERCE PREPARED BY JAYESH RAJ ROLL NO. 008 M.COM S3

2. Chart Patterns Understanding how stock price movements form patterns that help in predicting future trends. The main chart patterns are: 1. Support and Resistance Patterns 2. Reversal Patterns 3. Continuation Patterns

3. Support and Resistance Support: A price level where the stock stops falling and starts rising. Resistance: A price level where the stock stops rising and starts falling. If resistance is broken → Bullish trend. If support is broken → Bearish trend. Role Reversal When a resistance level is broken, it becomes a new support. When a support level is broken, it becomes a new resistance.

4. SUPPORT AND RESISTANCE GRAPH

5. Reversal Patterns Reversal patterns show a change in the direction of stock’s price movement. They indicate that a trend is ending and a new trend is starting.

6. Head and Shoulder Pattern A pattern with three peaks: - Left Shoulder: Initial rise and fall. - Head: Higher peak. - Right Shoulder: Lower peak. Breaking the neckline → Bearish trend. The opposite of the head and shoulders pattern. Signals a shift from a bearish trend to a bullish trend. Inverse Head and Shoulder Pattern

7. - Double Top: Two peaks before a drop (Bearish). - Triple Top: Three peaks before a drop (Bearish). - Double Bottom: Two dips before a rise (Bullish). - Triple Bottom: Three dips before a rise (Bullish). Other Reversal Patterns

8. Continuation Patterns These patterns indicate a pause in the market before the price continues in the same direction as before. Triangle Patterns - Symmetrical Triangle: Converging highs and lows, leading to a breakout. - Ascending Triangle: Flat top, rising bottom → Bullish breakout. - Descending Triangle: Flat bottom, falling top → Bearish breakout.

9. Wedges - Falling Wedge: Downward slant, signals an upward breakout (Bullish). - Rising Wedge: Upward slant, signals a downward breakout (Bearish).

10. Flags and Pennants Appear after a sharp price move and indicate continuation: - Bullish Flag: Small downward move after an uptrend. - Bearish Flag: Small upward move after a downtrend. - Pennants: Small symmetrical triangles before price breakout.

11. Rectangle Pattern Price moves between parallel support and resistance levels. - Bullish Rectangle: Breaks above resistance → Uptrend continues. - Bearish Rectangle: Breaks below support → Downtrend continues.

12. Conclusion - Support & Resistance show key price levels. - Reversal Patterns indicate trend changes. - Continuation Patterns confirm ongoing trends. Understanding these helps in better investment decisions.

13. References Books Murphy, J. J. (1999). Technical Analysis of the Financial Markets: A Comprehensive Guide to Trading Methods and Applications. New York Institute of Finance. Websites https://www.investopedia.com https://www.tradingview.com