Bearish Scenario: Sales below 5220... Bullish Scenario: Buys above 5225 (if price fails to break below decisively) ...
STOCKS: reversal chart patterns
2020-05-28 • Updated
Practice
On May 27, there was a notable drop in the stock market at the beginning of the American session. Later on, most stocks picked up making a quick reversal. That gives us a good opportunity to check for the reversal chart patterns and compare them between different stocks. We will take three from different market sectors to avoid industry-like pattern repetition: Amazon, Netflix, and Amazon. See below.
At the bottom of each drop, we have early signs of a bullish reversal. Amazon and Mastercard have a hammer chart formation at the bottom of the downswing. Although both hammers are of the same color as the red of the bearish candles, it may be taken as an early precursor of a possible change of market mood. Netflix, in turn, had several bullish candles in a row which laid the start of the upswing we see.
Theory
Hammer
Hammer is useful because it is a 1-candle pattern. It does require confirmation and time-verification just as all other patterns but it is easy to pick it out from the chart because it has a very distinctive form. Works both in bullish and bearish reversals.
Three white soldiers
It doesn’t have to be exactly three – in the example of Netflix on May 27 we see series of four bullish candles in a row. The idea is that if after a large bearish move suddenly several bullish candles appear one after another, that means a high potential of a bullish reversal.
You can check the other formations in our article specifically dedicated to reversal patterns – use it and make it work for you!
Similar
Bearish Scenario: Sell below 39600... Anticipated Bullish Scenario: Intraday buys above 39750... Bullish Scenario after Retracement: Intraday buys above 39150
Coinbase (#COIN) saw its revenue rise to $773 million in Q1 2024, marking a 23% increase from the previous quarter and surpassing analyst expectations.
Latest news
Jerome H. Powell, the Federal Reserve chair, stated that the central bank can afford to be patient in deciding when to cut interest rates, citing easing inflation and stable economic growth. Powell emphasized the Fed's independence from political influences, particularly relevant as the election season nears. The Fed had raised interest rates to 5.3 ...
Hello again my friends, it’s time for another episode of “What to Trade,” this time, for the month of April. As usual, I present to you some of my most anticipated trade ideas for the month of April, according to my technical analysis style. I therefore encourage you to do your due diligence, as always, and manage your risks appropriately.
Bearish scenario: Sell below 1.0820 / 1.0841... Bullish scenario: Buy above 1.0827...