Technical Analysis & Chart Patterns

Dark Cloud Cover

A two-candle formation in which a falling candle opens above the prior rising candle's close and closes below its midpoint.

Test: previous candle rises; current Open > previous High; current Close < midpoint of previous body but above its Open qualitative

Descending Triangle

A formation with a flat lower boundary and a falling upper boundary, so the range narrows downward toward a point.

Test: two or more lows at approximately the same level, with successively lower highs converging on them qualitative

Technical Analysis & Chart Patterns

Doji

A candlestick whose open and close are at or very near the same price, producing almost no body.

Test: absolute value of (Close - Open) is a very small fraction of the period's High minus Low, conventionally under 5% qualitative

Technical Analysis & Chart Patterns

Double Bottom

Two troughs at approximately the same price separated by a peak, forming a W shape on the chart.

Test: two lows within a small percentage of each other, separated by a rally to an intervening high that is later exceeded qualitative

Technical Analysis & Chart Patterns

Double Top

Two peaks at approximately the same price separated by a trough, forming an M shape on the chart.

Test: two highs within a small percentage of each other, separated by a decline to an intervening low that is later breached qualitative

Technical Analysis & Chart Patterns

Dow Theory

An early framework holding that markets move in primary, secondary and minor trends, and that indices must confirm one another.

Test: a primary trend is established when successive peaks and troughs move in one direction and a second related index confirms the same direction qualitative

Technical Analysis & Chart Patterns

Downtrend

A price sequence in which each significant high is below the previous high and each significant low is below the previous low.

Test: current swing high < previous swing high, and current swing low < previous swing low qualitative