Chart Patterns

A bull flag is a pause in an uptrend: after a sharp upward leg (the pole), price drifts down or sideways in a tight channel (the flag) on declining volume. The pattern resolves when price breaks the flag's upper boundary — the market catching its breath before continuing, not changing its mind.

A bear flag is a pause in a downtrend. After an impulsive leg down (the pole), price drifts up or sideways in a tight channel on declining volume, then resolves lower when the channel breaks. It is the market resting between sellers, not reversing.

A head and shoulders is a reversal formation: three peaks where the middle one (the head) is highest and the outer two (the shoulders) are lower and roughly level. A break of the neckline drawn under the two intervening lows completes it and turns the trend down.

A falling wedge is a converging formation where both the highs and the lows fall, but the highs fall faster — so the range narrows as price grinds down. It is a bullish formation despite its downward shape, and it completes on a break of the upper boundary.

A double bottom is a reversal: price makes a low, bounces to an intervening high, returns to roughly the same low and holds, then breaks above that intervening high. The second low failing to break the first is the evidence that selling has run out.

An ascending triangle has a flat upper boundary and a rising lower one: price tests the same resistance repeatedly while the pullbacks between tests get shallower. The compression resolves when the flat level breaks, most often upward.