Technical Analysis & Chart Patterns — 65 Terms Defined

Fibonacci Retracement Technical Analysis & Chart Patterns % Horizontal levels drawn at set percentages of a prior price move, used to mark potential areas where a pullback may pause. Retracement Level = High - (High - Low) x Ratio, where common ratios are 23.6%, 38.2%, 50%, 61.8% and 78.6%

Flag Pattern Technical Analysis & Chart Patterns qualitative A short, shallow consolidation in a small parallel channel that slopes against the direction of a sharp preceding move. Test: a steep prior move, followed by a brief parallel-sided consolidation retracing only a small portion of it

Gap Technical Analysis & Chart Patterns % A discontinuity on a chart where a period's entire range lies away from the previous period's range, with no trading in between. Gap % = (Current Open - Previous Close) / Previous Close x 100

Gap Down Technical Analysis & Chart Patterns % An opening price below the previous period's low, leaving an unfilled space on the chart. Test: Current Open < Previous Low

Gap Up Technical Analysis & Chart Patterns % An opening price above the previous period's high, leaving an unfilled space on the chart. Test: Current Open > Previous High

Hammer Technical Analysis & Chart Patterns qualitative A candlestick with a small body near the top of its range and a long lower wick, appearing after a decline. Test: Lower Wick is at least twice the Body, Upper Wick is minimal, and the candle follows a decline

Hanging Man Technical Analysis & Chart Patterns qualitative A candlestick with a small body near the top of its range and a long lower wick, appearing after an advance. Test: Lower Wick is at least twice the Body, Upper Wick is minimal, and the candle follows an advance

Harami Technical Analysis & Chart Patterns qualitative A two-candle formation in which a small body sits entirely within the range of the preceding large body. Test: current body's high and low both fall inside the previous candle's body

Head and Shoulders Technical Analysis & Chart Patterns qualitative A formation of three peaks in which the middle peak is the highest and the outer two are roughly level, joined by a neckline through the intervening lows. Neckline = line through the two lows between the peaks; conventional measured move = Head Height above Neckline, projected down from the break

Heikin-Ashi Technical Analysis & Chart Patterns ₹ A modified candlestick chart in which each period's values are averaged with the previous period's to smooth the series. HA Close = (Open + High + Low + Close) / 4; HA Open = (Previous HA Open + Previous HA Close) / 2

Inverse Head and Shoulders Technical Analysis & Chart Patterns qualitative A formation of three troughs in which the middle trough is the lowest and the outer two are roughly level, joined by a neckline through the intervening highs. Neckline = line through the two highs between the troughs; conventional measured move = Head Depth below Neckline, projected up from the break

Inverted Hammer Technical Analysis & Chart Patterns qualitative A candlestick with a small body near the bottom of its range and a long upper wick, appearing after a decline. Test: Upper Wick is at least twice the Body, Lower Wick is minimal, and the candle follows a decline

Island Reversal Technical Analysis & Chart Patterns qualitative A cluster of periods isolated on both sides by gaps in opposite directions, leaving it detached from the surrounding chart. Test: a gap in one direction, one or more periods of trading, then a gap back in the opposite direction, with the two gaps overlapping in price

Line Chart Technical Analysis & Chart Patterns qualitative A chart that joins each period's closing price with a continuous line, discarding the open, high and low. Test: exactly one value per period, conventionally the close, is plotted and connected

Marubozu Technical Analysis & Chart Patterns qualitative A candlestick with no wicks, where the open and close are the period's extremes. Test: Open equals either the High or the Low, and Close equals the other, so both wicks are zero or negligible

Morning Star Technical Analysis & Chart Patterns qualitative A three-candle formation of a large falling candle, a small-bodied candle, then a large rising candle closing well into the first body. Test: candle 1 falls strongly; candle 2 has a small body below it; candle 3 rises and closes above the midpoint of candle 1's body

Open, High, Low, Close Technical Analysis & Chart Patterns ₹ The four prices that summarise a trading period: the first trade, the highest, the lowest and the last. Range = High - Low; Change = Close - Open; True Range also considers the previous Close

Pennant Technical Analysis & Chart Patterns qualitative A short converging consolidation following a sharp move, forming a small symmetrical triangle. Test: a steep prior move, followed by a brief consolidation whose upper and lower boundaries converge

Piercing Pattern Technical Analysis & Chart Patterns qualitative A two-candle formation in which a rising candle opens below the prior falling candle's close and closes above its midpoint. Test: previous candle falls; current Open < previous Low; current Close > midpoint of previous body but below its Open

Pivot Point Technical Analysis & Chart Patterns ₹ A reference price computed from the previous period's high, low and close, with support and resistance levels derived from it. Pivot P = (High + Low + Close) / 3; R1 = 2P - Low; S1 = 2P - High; R2 = P + (High - Low); S2 = P - (High - Low)

Point and Figure Chart Technical Analysis & Chart Patterns ₹ A chart that plots columns of Xs and Os for price movement of a set size, ignoring time entirely. New X or O is added each time price moves one box size; a reversal requires a move of the reversal amount, typically three boxes

Price Action Technical Analysis & Chart Patterns qualitative The analysis of raw price movement itself, without indicators derived from it. Test: the reading uses only the sequence of highs, lows, opens and closes, with no calculated overlay

Pullback Technical Analysis & Chart Patterns qualitative A temporary move against the prevailing direction within an ongoing trend. Test: price retraces a portion of the prior move without violating the swing point that defines the trend

Rectangle Pattern Technical Analysis & Chart Patterns qualitative A consolidation bounded by roughly horizontal support and resistance, with price oscillating between them. Test: two or more highs at approximately one level and two or more lows at approximately another, with no convergence