Technical Analysis & Chart Patterns
7 terms
Dark Cloud Cover
Technical Analysis & Chart Patterns
qualitative
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
Descending Triangle
Technical Analysis & Chart Patterns
qualitative
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
Doji
Technical Analysis & Chart Patterns
qualitative
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%
Double Bottom
Technical Analysis & Chart Patterns
qualitative
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
Double Top
Technical Analysis & Chart Patterns
qualitative
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
Dow Theory
Technical Analysis & Chart Patterns
qualitative
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
Downtrend
Technical Analysis & Chart Patterns
qualitative
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