A thread on Trading Chart pattern set-ups with annotated charts examples.

#Trading #swingtrading
1. The Double Bottom:

A trend reversal pattern.
Two lows of similar levels are formed.

BO of the Neckline shows trend reversal by forming a Higher swing high which is also the entry point.

SL: LOD or swing low at a lower TF

Height of the NL to B1
2. The Volatility contraction pattern, VCP by Mark Minervini

After a prior uptrend, a stock digests its gains, and profit taking happens. It then bases and gets ready for the next uptrend. VCP is a characteristic of a constructive base. It has the following characteristics:
VCP cont..
Contraction in:
1. price range of successive swing high lows from left to right.
2. time-taken for each contractions from left to right.
3. Volumes from left to right.

Price breaks out with an explosion in volatility with volumes post 3/4 contractions.

All Triangles post an uptrend are VCPs,
Note: Symm. T can break out on either side.
Buy above PIVOT point, above the DTL = 8336
SL Swing low = 7590 (or entry days low)

3/3 Image
3. Ascending Triangle pattern.

Resistance is a horizontal line.
Support is an up-trending line.
Note the VCP inside the pattern.

Entry at Breakout above the Resistance.
BO with Volumes tends to be more successful.
SL = LOD or swing low.

4. Flag Pattern.

Pattern looks like a flag.
Has a pole (prior uptrend) and a Mast (retracement due to profit taking).
Constructive Flags must have a volume dry-up during the mast formation.

Entry = Break of DTL (volume on BO is necessary).
SL = Swing low or LOD
5. A Falling Wedge.

Price bounces between two downward sloping trendlines which are converging.
They have a Bullish bias post an uptrend (but can break either side).

Entry = Break of Resistance line (+ Volumes better).
SL = LOD or below Support line.

#Caplinpoint Image
6. The Head and Shoulder Pattern.

1 of the most reliable reversal patterns.
A trend change from HL-HH to LH-LL (marked on chart).
Line joining 2 lows forms the neckline.
Trade entry = breakdown of NL
Target = (HH-NL) subtended downwards from breakdown.

1/n Image
Volume profile of a good HnS.
1. Head has lower volume than LS
2. RS has an even lower volume than Head


2/2 Image
8. Inverse Triangles/ Broadening wedges/ Megaphones

They generally have a bearish bias long-term.
Form consecutive Higher High and higher lows.

swing traders can initiate trades at the reversal points on either side.

has a 20% upside after the flag breakout Image
Latest contraction in price is around single digits. Hardly any room left for one more contraction.
This will release all the energy soon. Image
Another HnS with a downsloping Neckline.
They are more bearish than usual.
Beautiful, Target met.
Flag pattern target would be the length of pole extended upwards from the Breakout point.
9. The Flat Base Pattern.

Reliable, easier to spot, and easiest to manage risk.
Prices bounces between a rectangle for weeks before Breaking out above (or below, in a downtrend).

Entry: At the BO.
SL: below the BO candle.
target: height of the rectangle.

eg: #Wonderla Image
Example: Kennamet

Cup and Handle with a Double bottom.

Beautiful. Image
10. The High Tight Flag/ The powerplay set-up.

one of my fav. as a swing trader.

A Flag with:
=>100% move in <8 weeks
correction of =<25% from the top.

Entry: Break of Flag DTL or flag top
SL: low of the swing low/mast low
Target: same as flag
Eg: SRHHPOLTD (not completed) Image
Another example of a perfect VCP Image

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More from @SakatasHomma

Oct 16, 2022
Cyclicality and Stage analysis: 🧵🧵🧵

📈 Every stock goes through a cycle of 4 stages.
📈 Own the stock in Stage2
📈 Do NOT own it in Stage 4

We use the following to determine the stage:
1. Trend analysis: HH-HL or LH-LL
2. 30-week moving average slope, and
3. Volumes

Price Sideways between 2 levels
30 WMA Flat
Price whipsaws 30 WMs
Volumes increasing to the right side of base with increase in green towers

Uptrend HH-HL (higher high and higher low)
Price above 30WMA
30 WMA sloping up
Volume Green towers> Red towers

📈Stage 3:
Price sideways again
30 WMA Flat
Price whipsaws 30 WMA
Volumes higher with Red towers increasing

Downtrending price with LH-LL
Price below 30 WMA
30 WMA sloping down
volume Red towers> green towers

Some examples of post covid Bullrun darling superstocks
Read 14 tweets

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