Popular Bullish/Bearish Technical Patterns

Financials are at a pretty critical support level going into the new week. The market has continuously beaten the previous support levels in the last 4 weeks, making this bull rally the 2nd biggest Dow Jones surge (21.5%) since 1933 (31%).

Popular bullish and bearish technical patterns that are known to be very reliable.

Bearish Patterns

• Head and Shoulders – One of the most common and reliable pattern. If you see the stock form a “right shoulder” and breaks through the previous support. Watch out.

• Double Top – When the stock makes two tops similiar in the resistance level and dips down, it’s at risk of breaking through the support level and plummet thereafter.

• Triple Top – Similar to Double Top but with three top levels similiar in resistance levels.

Bullish Patterns

• Inverse Head and Shoulders – the inverse of the bearish “head and shoulders” pattern. In this case if you see a breakout above the previous resistance, it’s time to buy.

• Double Bottom – An inverse of double top where the stock hits a bottom support level twice and breaks out of the previous resistance.

• Cup and Handle – This pattern forms when a stock forms a cup like pattern and then retreats briefly to form a “handle”. Then the stock prepares to break out of the previous resistance and goes up.