Chart Structure Patterns

Often bearish after a confirmed lower-boundary break, but it can resolve either way.

Construction

Both boundaries rise while the lower boundary rises faster, compressing price into a narrowing structure.

Confirmation

Require a close outside the lower boundary, then watch whether price accepts below it. A wick through the line is not enough by itself.

Failure

A downside break that quickly reclaims the boundary is a failed breakdown; an upside resolution cancels the conventional bearish read.

Often bullish after a confirmed upper-boundary break, but it can resolve either way.

Construction

Both boundaries fall while the upper boundary falls faster, compressing price into a narrowing structure.

Confirmation

Require a close outside the upper boundary, then watch whether price accepts above it. A wick through the line is not enough by itself.

Failure

An upside break that quickly loses the boundary is a failed breakout; a downside resolution cancels the conventional bullish read.

Symmetrical triangles are neutral before the break; ascending and descending variants show directional pressure, not certainty.

Construction

Symmetrical triangles contract between converging boundaries. Ascending triangles pair flat resistance with rising lows; descending triangles pair flat support with falling highs.

Confirmation

Use a boundary close and acceptance outside the structure. Compare breakout participation with the instrument's normal volume behavior.

Failure

Repeated boundary crossings or a breakout that immediately returns to the middle indicates a weak or invalid structure.

Usually evaluated as a continuation setup in the direction of the initial impulse, only after a confirmed exit.

Construction

A fast directional move forms the flagpole; a short, contained countertrend channel or small triangle forms the pause.

Confirmation

Look for a close through the continuation boundary. A measured move based on the pole is a scenario estimate, not a promised target.

Failure

Deep retracement, prolonged sideways action, or a break through the opposite side weakens the continuation thesis.

A top confirms only after the neckline breaks; the inverse form uses the same logic upside down.

Construction

Three peaks form a higher center head between two lower shoulders, with reaction lows defining the neckline.

Confirmation

A close through the neckline is the trigger. A retest can improve entry definition, but markets do not owe a retest.

Failure

Reclaiming the neckline and then the right shoulder weakens the break. An irregular shape without a coherent neckline is not automatically this pattern.

Two tests create a candidate; the intervening swing level creates the confirmation line.

Construction

A double top tests a similar high twice with a reaction low between them. A double bottom mirrors the structure at support.

Confirmation

For a top, confirm below the reaction low; for a bottom, confirm above the reaction high. Similar does not mean tick-for-tick identical.

Failure

Before the confirmation line breaks, the formation may simply be a range. A sustained break through the two tested extremes invalidates the reversal read.

Price rotates between support and resistance until acceptance outside the range establishes a new auction.

Construction

Multiple reactions occur near horizontal boundaries. The center is usually lower quality; the edges offer clearer invalidation.

Confirmation

A breakout needs more than a brief probe. Look for a close, follow-through, or a retest that holds outside the boundary.

Failure

A quick return inside is a failed breakout. Repeated overshoots may mean the boundaries are zones rather than exact prices.

A channel organizes a trend; it does not guarantee that either boundary will hold.

Construction

Roughly parallel boundaries connect recurring swing points. An up-channel prints rising highs and lows; a down-channel prints falling highs and lows.

Confirmation

Use reactions at a boundary with the underlying swing structure. A boundary break matters more when a prior swing also fails.

Failure

Forcing lines through many candles or redrawing them after every bar produces hindsight. Treat clean breaks and slope changes as new information.

Conventionally bullish only after price clears the handle resistance.

Construction

A rounded base returns toward its prior high, followed by a smaller, usually downward-sloping handle.

Confirmation

Require a close above the handle or cup rim; the rounded cup alone is incomplete.

Failure

A deep handle that falls into the lower half of the cup or loses the cup low invalidates the structure.

Conventionally bearish only after price breaks the handle support.

Construction

A rounded top returns toward its prior low, followed by a smaller, usually upward-sloping handle.

Confirmation

Require a close below the handle or inverted-cup rim; the rounded top alone is incomplete.

Failure

A strong handle recovery into the upper half of the cup or a break above the cup high invalidates the structure.

A bearish reversal candidate only after the reaction-low support breaks.

Construction

Price tests a similar resistance zone three times with reaction lows between the peaks.

Confirmation

Require a close below the reaction-low support after the third test.

Failure

A sustained break above the three-peak resistance invalidates the topping interpretation.

A bullish reversal candidate only after the reaction-high resistance breaks.

Construction

Price tests a similar support zone three times with reaction highs between the troughs.

Confirmation

Require a close above the reaction-high resistance after the third test.

Failure

A sustained break below the three-trough support invalidates the bottoming interpretation.

A gradual bearish transition, confirmed only when support beneath the arc gives way.

Construction

Price changes from rising to falling through a broad curved top rather than one sharp peak.

Confirmation

Use a close below the base support or a clearly established lower-low sequence.

Failure

A renewed higher high and recovery of the prior trend invalidates the rounding-top thesis.

A gradual bullish transition, confirmed only when resistance above the arc is reclaimed.

Construction

Price changes from falling to rising through a broad curved bottom rather than one sharp trough.

Confirmation

Use a close above the base resistance or a clearly established higher-high sequence.

Failure

A renewed lower low and resumption of the prior decline invalidates the rounding-bottom thesis.

Conventionally bullish after an upside exit in the direction of the initial advance.

Construction

A sharp advance forms a flagpole, followed by a brief contraction between converging boundaries.

Confirmation

Require a close above the pennant's upper boundary.

Failure

A break below the lower boundary or deep retracement of the pole invalidates the continuation thesis.

Conventionally bearish after a downside exit in the direction of the initial decline.

Construction

A sharp decline forms a flagpole, followed by a brief contraction between converging boundaries.

Confirmation

Require a close below the pennant's lower boundary.

Failure

A break above the upper boundary or deep recovery of the pole invalidates the continuation thesis.

Directional outcome is conditional; widening swings show increasing disagreement, not a forecast.

Construction

Successive highs rise while successive lows fall, creating diverging boundaries and expanding volatility.

Confirmation

Use a close and acceptance outside a boundary; direction comes from the confirmed break.

Failure

A brief boundary probe followed by a return inside is a failed break, while shrinking swings negate the broadening structure.