Breakout of a Spread Triple Bottom
Spread Triple Bottom Breakdown consist of two extra columns, this equates to a seven wide pattern.
With the two columns lows forming above the support level. These extra columns are what is to referred to as the Spread in the Spread Triple Bottom. A Spread Triple Bottom Breakdown is confirmed when a break below the support level occurs. The most consistent signals can be obtained from a 7 row column, although, this pattern is able to be formed with more than two extra columns.
The breakdown has historically shown to be approximately the same as the distance from the highest point of the low to the support level.
Breakout of a Spread Triple Top
A descending Triple bottom is formed when the lows of the O-columns continue to make new lows. When the third O-column breeches the trend line with a breakdown this can be interpreted as a sell signal. This pattern is once again only five columns wide and should be used along with other analysis to determine a change in the current trend.
Downward Breakout of a Bearish Support Line
A downward breakout of a bearish support line is when a O-Column moves through a trend line. The trend line is formed off the new lows of the previous O-Columns. This can be considered a sell signal.
Head and Shoulders
A head and shoulders pattern consists of two shoulders, a neck line and a head. In the example shown here number 1 represents the first shoulder, then three columns of consolidation. Number two represents the head of the pattern, followed by another three columns of consolidation. The last shoulder is represented by the number 3. To confirm the pattern a high volume should be present when the trend changes direction and crosses over the neck line.
The neckline is formed at the lows of the consolidation periods in-between the shoulders. A head and shoulder pattern is considered one of the most reliable patterns but should always be used in conjunction with other analysis.
Trend Reversal – Double Top
This is a pattern that usually forms at the end of an upwards trend when the buyers have lost interest and the sellers out number the buyers.
Number 1 in the example represents the first top then 7 columns of consolidation. The lows in the consolidation form a support line at the lowest level. Number 2 represents the second top. When the downwards action has an increase in volume and breaks the support line this can be considered a sell signal. Historically this has shown us that this reversal should be the same distance found between the level from the tops to the support line.
Trend Reversal – Triple Top
The triple top is almost identical to a head and shoulders pattern. The only changes are that Number 2, which would normally be the head is now at the same level as what the shoulders. This creates a support line across 1,2 and 3 tops.
When there is an increase in volume and the sellers take over from the buyers. Consolidation in this signal can be found when it breaks the support level and could be considered a sell signal.
Trend Reversal Rectangle
This is a pattern that forms over many colums where distinct support and resistance levels are formed. Once there is a breakdown through the support level, by an increase in volume of sellers. This could be used as a signal to sell.
This pattern is formed by two O-columns which form a support level. The third O-column breeches this level. When this occurs it can be considered as a sell signal.