Chart Patterns

Chartpatterns represent market supply and demand in a pictorial format. Instead of pouring over tables of data and making notes of new highs, lows, and volume size at key turning points (although this would indeed work*); we can quickly look at a chart and see all this in one instance.

The old adage of  a picture is worth a thousand words is found to be demonstrably true when it comes to the equity, currency, and futures markets (or any market for that matter). Chart patterns represent the psychological underpinnings of supply and demand of the tradable issue.

We can see institutional buying and selling and get ahead of the competition, finding the biggest winning trades in the market! We can graph charts in multiple time frames: Monthly and Weekly for long term trend analysis, and Daily, 4 Hour, 1 Hour, 15 Minute for determining the shorter trend. Our preference is

to use the Monthly and Weekly to find the best trades and then use the Daily and 4 Hour to find the optimum entry and exit points.

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Continuation Patterns: Cup and handles, Cup with Saucers, Base on Base Patterns, Bull Flags, Bear Flag and Pennants, Flat Bases, Symmetrical Triangles, Ascending Triangles, Descending Triangles, Rising ChannelsRising Wedges, Falling Wedges, Diamond PatternsDouble Bottom ‘W’ Patterns

Reversal Patterns: Head and Shoulders, Inverse Head and Shoulders, Double Tops, Double Bottoms, Rising Channels, Triple Bottoms, Triple Tops…

We provide in-depth chart analysis for what we believe to be the best stocks in the market right now.  Stocks, the general market, commodities, and currencies.

*in fact this was Nicholas Darvas’ trading methodology. He would, using newspapers, note when a stock from a leading industry group was making a new high and then buy that stock. He would sell when the stock failed to make new highs and turned lower, making a fresh lower low. Darvas found that he didn’t need to know the ‘why’ or the reason the stock had turned, only that it had.

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Methodology

Here are some of the stock characteristics we look for:

Keeping an eye on the general market is essential to scoring big winning stocks. Even the best stocks will lag if the rest of the market doesn’t confirm the trend.

Institutional investors and pension funds seek out stocks with the best earnings and buy large quantities of them. Typically, the biggest winning stocks will have accelerating earnings for the current quarter when compared to the same quarter of the previous year. The bigger the percentage increase the better. Both annual earnings and the quarter over quarter earnings should also be accelerating.

Stocks with a new product or service are key for price gains.

We like stocks that are game changers, leaders in their industry group, and define the world we live in.

Chart Pattern Analysis

Chart patterns are a pictorial depiction of the underlying supply and demand of a stock, commodity, market index, or currency pair.

They worked in the Japanese rice markets of the 1700’s, and the cotton markets in America in the 19th century. And still today, they are an invaluable asset in the trader’s toolbox.

From cup and handle and ascending triangle continuation patterns to head and shoulders reversal patterns we cover the most profitable patterns when they appear on the charts.

You will find a blend of Western technical analysis and Japanese candlestick analysis used in the Trading Room chart commentary.

We provide detailed chart analysis in Chartbook® and premium access to our Live Trades Chartbook® where you can purchase in-depth stock chart analysis of the biggest winning trades in the stock market today.

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