Thread by @SakatasHomma

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.

ENTRY:
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

TARGET:
Height of the NL to B1
Eg: #GRANULES

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:
1/n

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.

2/n

All Triangles post an uptrend are VCPs,
eg, #TATAELXSI building a SYMMETRICAL TRIANGLE PATTERN and showing VCP.
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

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.

eg: #SCHAEFFLER

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
#SCHEFFLER

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

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

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

eg: #KANCHI

2/2

7. Cup and Handle pattern. 2T

https://twitter.com/Sakatas_Homma/status/1550464199892934656?s=20&t=UPgQD4R7N2OWzQEmrFOPOw

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.

eg: #INDIAGLYCOL
has a 20% upside after the flag breakout

beautiful HnS

https://twitter.com/Sakatas_Homma/status/1552894193286098944?s=20&t=1zL5kV6ookAOIF8OSpo6Hw

https://twitter.com/Sakatas_Homma/status/1552981362981842944?s=20&t=yVbNiK9ddT9Ie04J48YQQw

#VCP #UTTAMSUGAR
Latest contraction in price is around single digits. Hardly any room left for one more contraction.
This will release all the energy soon.

Another HnS with a downsloping Neckline.
They are more bearish than usual.
Beautiful, Target met.
#JUBLPHARMA

Flag pattern target would be the length of pole extended upwards from the Breakout point.
#APARINDS

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

Example: Kennamet

Cup and Handle with a Double bottom.

Beautiful.

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)

Another example of a perfect VCP