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BASICS OF STOCK

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MARKET AR
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What is a STOCK MARKET?

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A stock market, equity market, or share market is the aggregation of buyers

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and sellers of stocks (also called shares), which represent ownership claims
on businesses; these may include securities listed on a public stock exchange,

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as well as stock that is only traded privately, such as shares of private
companies which are sold to investors through equity crowd funding

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platforms.
Investment in the stock market is most often done via stockbrokerages and

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electronic trading platforms.
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Investment is usually made with an investment strategy in mind.
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Less than 3% population in India, invest in the share market.

What is a STOCK?

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At some point every company needs to raise money. Companies can either

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borrow it from somebody or raise it by selling part of the company.
By issuing stock, the company does not have to pay back the money or make

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interest payments.

How do stocks trade?

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AR
Most stocks are traded on exchanges such as the National Stock Exchange
(NSE) or Bombay Stock Exchange (BSE)
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Exchanges are simply places where buyers and sellers meet and decide on a
price for a stock. Think of it as a flea market where buyers and sellers come
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together and agree on a price for a product.

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BSE is the biggest stock exchange in the world in terms of number of

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listed companies (Over 5500 listed companies)

23 stock exchanges are in India
Where to buy a stock?

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Upsotx ‐ EQUITY

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Can we buy anything apart from

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stocks?

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COMMODITY

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FUTURES & OPTIONS
ETF
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UPSTOX is the 2nd largest broker in INDIA

What is Nifty, Bank NIFTY & Sensex?

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NIFTY ‐ The NIFTY 50 is a benchmark Indian stock market index that

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represents the weighted average of 50 of the largest Indian companies listed
on the NSE.

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BANK NIFTY ‐ Nifty Bank, or Bank Nifty, is an index comprised of the most
liquid and large capitalised Indian banking stocks.

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It provides investors with a benchmark that captures the capital market
performance of Indian bank stocks.

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The index has 12 stocks from the banking sector.
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SENSEX ‐ The BSE SENSEX (also known as the S&P Bombay Stock Exchange
Sensitive Index or simply SENSEX) is a free‐float market‐weighted stock
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market index of 30 well‐established and financially sound companies listed

on the Bombay Stock Exchange. The 30 constituent companies which are
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some of the largest and most actively traded stocks, are representative of
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various industrial sectors of the Indian economy.

What is INTRADAY?

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Intraday is a form of speculation in securities in which a trader buys and sells

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a financial instrument within the same trading day, so that all positions are
closed before the market closes for the trading day to avoid unmanageable

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risks and negative price gaps between one day's close and the next day's price
at the open.

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Traders who trade in this capacity are generally classified as speculators.

What is MARKET TIMINGS? (EQUITY& FNO)

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Pre Market
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– 9:00am to 9:15am
Regular Market – 9:15am to 3:30pm
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Post Market – 3:30pm to 4:00pm

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Commodity markets starts at 9:00am and ends at 11:30pm

What is LEVERAGE?

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Leverage refers to the use of debt (borrowed funds) to amplify returns from

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an investment or project.
Investors use leverage to multiply their buying power in the market.

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What is MIS?

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MIS stands for Margin Intraday Square‐Off.

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MIS, as the name suggests, is a facility that can be used only for intraday
trading.
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With MIS, you can trade across segments – cash, derivatives, index options
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and commodity futures.

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If we use MIS type of order, we can get minimum 5x leverage

What is SHORT TERM TRADING?

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Short‐term trading refers to those trading strategies in stock market or

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futures market in which the time duration between entry and exit is within a
range of few days to few weeks.

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All the stocks are in DEMATERIALISED format in your DEMAT ACCOUNT.

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What is LONG TERM TRADING?

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When the duration between buying and selling ranges within a few months to
a few years, it is referred to as long‐term trading.
M
Less stressful: There is no need to constantly follow the market when trading
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long‐term.
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All the stocks are in DEMATERIALISED format in your DEMAT ACCOUNT.

What is a Watch list?

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A watch list is a set of securities that an investor monitors for potential

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trading or investing opportunities.

What is LONG?

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Having a “long” position in a security means that you own the security.

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Investors maintain “long” security positions in the expectation that the stock
will rise in value in the future.

What is SHORT?
AR
M
A "short" position is generally the sale of a stock you do not own. Investors
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who sell short believe the price of the stock will decrease in value.
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Shorting is only allowed in INTRADAY trading.

BASIC MARKET JARGONS

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OPEN – Price of the stock at open.

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HIGH – Highest price of the stock from open till the current time.
LOW – Lowest price of the stock from open till the current time.

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CLOSE – Price of the stock at close.

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52 weeks High – Highest price of the stock in a period of 52 weeks.

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52 weeks Low – Lowest price of the stock in a period of 52 weeks.
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You can place a price alert for any stock and get notified.
TYPES OF ORDERS

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MARKET – BUY/SELL at the market price.

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LIMIT – BUY/SELL at a mentioned price.
STOPLOSS MARKET – Order gets triggered only when the price breaches a

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particular level. BUY/SELL at the market price.
STOPLOSS LIMIT – Order gets triggered only when the price breaches a

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particular level. BUY/SELL at the limit price.

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AFTER MARKET ORDER – Place an order after the markets are closed or
before market is open
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Simple thumb rule:
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 For long, use limit when LTP is higher.

 For short, use limit when LTP is lower.
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 For long, use SL-L/SL-M when LTP is lower.

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 For short, use SL-L/SL-M when LTP is higher.

WHEN TO USE LIMIT ORDER?

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For BUY – CMP is higher than the LIMIT price

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For SELL – CMP is lower than the LIMIT price

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WHEN TO USE SL‐L OR SL‐M ORDER?

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For BUY – CMP is lower than the TRIGGER price

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For SELL – CMP is higher than the TRIGGER price

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RISK REWARD RATIO

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The risk/reward ratio marks the prospective reward an investor can earn for

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every rupee they risk on an investment.
Many investors use risk/reward ratios to compare the expected returns of an

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investment with the amount of risk they must undertake to earn these
returns.

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Consider the following example:

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An investment with a risk‐reward ratio of 1:7 suggests that an investor is
willing to risk Rs.1, for the prospect of earning Rs.7.
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HIGH RR 1:3 > 1:1 > 1:0.5 LOW RR

POSITION SIZING

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Position sizing refers to the size of a position within a particular portfolio, or

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the dollar amount that an investor is going to trade.
Investors use position sizing to help determine how many units of security

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they can purchase, which helps them to control risk and maximize returns.

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E.g.: Lets assume your capital is Rs.10,000/‐ & RR is 1%

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Risk = 1% * 10,000 = Rs.100/trade
We give a call in TATAMOTORS, say
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BUY @ 339
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TRGT is 342
SL is 338
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Your position sizing for this trade should be 100 Qty, since the SL point
is Rs. 1/‐
BREAKEVEN

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A break‐even price is the amount of money, or change in value, for which an

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asset must be sold to cover the costs of acquiring and owning it.

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Various cost for trading are as follows,

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BROKERAGE
EXCHANGE TRANSACTION CHARGES

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SEBI TURNOVER FEES M
IGST
STAMP DUTY
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Usually the cost for intraday trade is Rs.40~50

 ES
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TECHNICAL

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ANALYSISAR
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What is a TECHNICAL ANALYSIS?

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In finance, technical analysis is an analysis methodology for forecasting the

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direction of prices through the study of past market data, primarily price and
volume.

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Technical analysis is a trading discipline employed to evaluate investments
and identify trading opportunities by analyzing statistical trends gathered

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from trading activity, such as price movement and volume.

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Price action, support & resistance, types of candles, pattern, trends,
indicators M
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Technical analysis is used by traders on all time frames, from one-minute

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charts to weekly and monthly charts.

What is an INDEX

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An index is a method to track the performance of a group of assets in a

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standardized way.
Indexes typically measure the performance of a basket of securities intended

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to replicate a certain area of the market.

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These could be a broad‐based index that captures the entire market, such as
the SENSEX or NIFTY, or more specialized such as indexes that track a

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particular industry or segment, such as BANK NIFTY or FINNIFTY.
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Major sectorial indices in Indian market are BANK, AUTO, FIN. SERVICE,
FMCG, IT, MEDIA, METAL, PHARMA, PSU bank, PVT bank & REALTY
What is a stock chart?

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A chart is a graphical representation of price and volume movements of a

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stock over a certain period of time.
In the graphical chart, the X‐axis represents the time period and the Y‐axis

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represents the price movement.

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The time period can vary from intra‐day to even a few months or more.

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Commonly used charts are BARS, CANDLES, HOLLOW CANDLES, LINE,

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AREA & BASE LINE

What is a TIME FRAME?

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Time Frame is the duration of time of a single price bar on a chart.

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On a 1‐minute time frame chart, each candle contains the opening, closing,
high and low price of that 1‐minute.

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The commonly used time frames are 1 minute, 5 minutes, 10 minutes, 15

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minutes, 30 minutes, 1 hour, 1 day, 1 week, 1 month

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Intra day trading – 5 min to 60 min

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Swing trading – 60 min to 1 day

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Long term investment – 1 day to 1 month

What is a CANDLE?

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A candlestick is a type of price chart used in technical analysis that displays

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the high, low, open, and closing prices of a security for a specific period.

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BODY OF A CANDLE

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Bullish means the price is increasing, Bearish means the price is

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decreasing.
What is a SUPPORT & RESISTANCE?

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Support is a price level where a downtrend can be expected to pause due to a

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concentration of demand or buying interest.
As the price of assets or securities drops, demand for the shares increases,

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thus forming the support line.

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Meanwhile, resistance zones arise due to selling interest when prices have
increased.

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Support = Demand zone
Resistance = Supply zone
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Technical analysts use support and resistance levels to identify price

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points on a chart where the probabilities favour a pause or reversal of a

prevailing trend.
What is an MA?

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In statistics, a moving average is a calculation used to analyze data points by

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creating a series of averages of different subsets of the full data set.
In finance, a moving average (MA) is a stock indicator that is commonly used

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in technical analysis.

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The reason for calculating the moving average of a stock is to help smooth out
the price data by creating a constantly updated average price.

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A golden cross is a chart pattern in which a relatively short-term moving

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average (50 SMA) crosses above a long-term moving average (200 SMA).
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A death cross is a chart pattern in which a relatively short-term moving

average (50 SMA) crosses below a long-term moving average (200 SMA).
What is an EMA?

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An exponential moving average (EMA) is a type of moving average (MA) that

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places a greater weight and significance on the most recent data points.
The exponential moving average is also referred to as the exponentially

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weighted moving average.

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An exponentially weighted moving average reacts more significantly to recent
price changes than a simple moving average (SMA), which applies an equal

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weight to all observations in the period.
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What is an VWAP?

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The volume‐weighted average price (VWAP) is a trading benchmark used by

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traders that gives the average price a security has traded at throughout the
day, based on both volume and price.

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VWAP is important because it provides traders with insight into both the
trend and value of a security.

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What is an VOLUME?

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Trading volume is a measure of how much a given financial asset has traded

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in a period of time.
For stocks, volume is measured in the number of shares traded.

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For futures and options, volume is based on how many contracts have

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changed hands.
Looking at volume patterns over time can help get a sense of the strength or

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conviction behind advances and declines in specific stocks and entire
markets.
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The same is true for options traders, as trading volume is an indicator of an
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option’s current interest.
In fact, volume plays an important role in technical analysis and features
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prominently among some key technical indicators.

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What is GAP UP/DOWN?

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Gapping occurs when the price of a stock, or another asset, opens above or

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below the previous day's close with no trading activity in between.
A gap is the area discontinuity in a security's price chart.

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Gaps may materialize when headlines cause market fundamentals to change

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rapidly during hours when markets are typically closed; for instance, the
result of an earnings call after‐hours.

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 ES
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CANDLE STICK

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PATTERNS AR
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CANDLE STICK PATTERN

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The candlesticks are used for identifying trading patterns which help the

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technical analyst to set up their trades.
These candlestick patterns are used for predicting the future direction of the

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price movements.

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The candlestick patterns are formed by grouping two or more candlesticks in
a certain way.

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Sometimes powerful signals can be also given by just one candlestick.
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HAMMER

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Hammer is a single candlestick pattern that is

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formed at the end of a downtrend and signals
bullish reversal.

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The real body of this candle is small and is
located at the top with a lower shadow which

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should be more than twice the real body. This
candlestick chart pattern has no or little upper

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shadow. M
The psychology behind this candle formation is
that the prices opened and sellers pushed down
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the prices. BULLISH

Suddenly the buyers came into the market and
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pushed the prices up and closed the trading

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session more than the opening price.

INVERTED HAMMER

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An Inverted Hammer is formed at the end of the

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downtrend and gives a bullish reversal signal.
In this candlestick, the real body is located at the

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end and there is a long upper shadow.

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It is the inverse of the Hammer Candlestick
pattern.

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This pattern is formed when the opening and
closing prices are near to each other and the
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upper shadow should be more than twice the
real body.
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BULLISH
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HANGING MAN

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Hanging Man is a single candlestick pattern which is

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formed at the end of an uptrend and signals bearish
reversal.

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The real body of this candle is small and is located at
the top with a lower shadow which should be more

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than the twice of the real body.

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This candlestick pattern has no or little upper
shadow. M
The psychology behind this candle formation is that
the prices opened and seller pushed down the
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prices.
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Suddenly the buyers came into the market and

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pushed the prices up but were unsuccessful in doing

so as the prices closed below the opening price.
SHOOTING STAR

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Shooting Star is formed at the end of the uptrend

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and gives bearish reversal signal.
In this candlestick chart the real body is located

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at the end and there is long upper shadow.

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It is the inverse of the Hanging Man Candlestick
pattern.

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This pattern is formed when the opening and
closing prices are near to each other and the
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upper shadow should be more than the twice of
the real body. BEARISH
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DOJI

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Doji pattern is a candlestick pattern of

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indecision which is formed when the opening
and closing prices are almost equal.

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It is formed when both the bulls and bears are
fighting to control prices but nobody succeeds in

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gaining full control of the prices.

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The candlestick pattern looks like a cross with
very small real body and long shadows.
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SPINNING TOP

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The spinning top candlestick pattern is same as

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the Doji indicating indecision in the market.
The only difference between spinning top and

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doji is in their formation, the real body of the
spinning is larger as compared to Doji.

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PIERCING PATTERN

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Piercing pattern is multiple candlestick chart

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pattern that is formed after a downtrend
indicating a bullish reversal.

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It is formed by two candles, the first candle
being a bearish candle which indicates the

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continuation of the downtrend.

AR
The second candle is a bullish candle which
opens gap down but closes more than 50% of
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the real body of the previous candle which
shows that the bulls are back in the market and
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a bullish reversal is going to take place. BULLISH

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PIERCING PATTERN

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Piercing pattern is multiple candlestick chart

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pattern that is formed after a downtrend
indicating a bullish reversal.

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It is formed by two candles, the first candle
being a bearish candle which indicates the

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continuation of the downtrend.

AR
The second candle is a bullish candle which
opens gap down but closes more than 50% of
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the real body of the previous candle which
shows that the bulls are back in the market and
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a bullish reversal is going to take place. BULLISH

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BULLISH ENGULFING

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Bullish Engulfing is a multiple candlestick chart

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pattern that is formed after a downtrend
indicating a bullish reversal.

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It is formed by two candles, the second
candlestick engulfing the first candlestick.

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The first candle is a bearish candle that

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indicates the continuation of the downtrend.
The second candlestick is a long bullish candle
M
that completely engulfs the first candle and
shows that the bulls are back in the market.
CK

BULLISH
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THE MORNING STAR

ES
The Morning Star is multiple candlestick charts

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pattern which is formed after a downtrend
indicating bullish reversal.

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It is made of 3 candlesticks, first being a bearish
candle, second a Doji and the third being a

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bullish candle.

AR
The first candle shows the continuation of the
downtrend, the second candle being a doji
M
indicates indecision in the market, and the third
bullish candle shows that the bulls are back in
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the market and reversal is going to take place.

The second candle should be completely out of BULLISH
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the real bodies of the first and third candles.

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THREE WHITE SOLDIERS

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The Three White Soldiers is a multiple

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candlestick pattern that is formed after a
downtrend indicating a bullish reversal.

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These candlestick charts are made of three long
bullish bodies which do not have long shadows

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and are open within the real body of the
previous candle in the pattern.

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M
CK

BULLISH
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WHITE MARUBOZU

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The White Marubozu is a single candlestick

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pattern that is formed after a downtrend
indicating a bullish reversal.

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This candlestick has a long bullish body with no
upper or lower shadows which shows that the

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bulls are exerting buying pressure and the
markets may turn bullish.

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CK

BULLISH
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THREE INSIDE UP

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The Three Inside Up is multiple candlestick

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pattern which is formed after a downtrend
indicating bullish reversal.

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It consists of three candlesticks, the first
being a long bearish candle, the second

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candlestick being a small bullish candle
which should be in the range the first

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candlestick. M
The third candlestick should be a long bullish
candlestick confirming the bullish reversal.
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BULLISH
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BULLISH HARAMI

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The Bullish Harami is multiple candlestick

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chart pattern which is formed after a
downtrend indicating bullish reversal.

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It consists of two candlestick charts, the first
candlestick being a tall bearish candle and

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second being a small bullish candle which
should be in the range of the first

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candlestick. M
The first bearish candle shows the
continuation of the bearish trend and the
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second candle shows that the bulls are back

in the market. BULLISH
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TWEEZER BOTTOM

ES
The Tweezer Bottom candlestick pattern is a

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bullish reversal candlestick pattern that is
formed at the end of the downtrend.

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It consists of two candlesticks, the first one
being bearish and the second one being

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bullish candlestick.

AR
Both the candlesticks make almost or the
same low.When the Tweezer Bottom
M
candlestick pattern is formed the prior
trend is a downtrend.
CK

BULLISH
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THREE OUTSIDE UP

ES
The Three Outside Up is multiple

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candlestick pattern which is formed after a
downtrend indicating bullish reversal.

TE
It consists of three candlesticks, the first
being a short bearish candle, the second

KE
candlestick being a large bullish candle
which should cover the first candlestick.

AR
The third candlestick should be a long
M
bullish candlestick confirming the bullish
reversal.
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BULLISH
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ON-NECK PATTERN

ES
The on neck pattern occurs after a

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downtrend when a long real bodied bearish
candle is followed by a smaller real bodied

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bullish candle which gaps down on the open
but then closes near the prior candle’s close.

KE
The pattern is called a neckline because the
two closing prices are the same or almost

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the same across the two candles, forming a
horizontal neckline.
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CK

BULLISH
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THREE OUTSIDE UP

ES
The Three Outside Up is multiple

DG
candlestick pattern which is formed after a
downtrend indicating bullish reversal.

TE
It consists of three candlesticks, the first
being a short bearish candle, the second

KE
candlestick being a large bullish candle
which should cover the first candlestick.

AR
The third candlestick should be a long
M
bullish candlestick confirming the bullish
reversal.
CK

BULLISH
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DARK CLOUD COVER

ES
Dark Cloud Cover is multiple candlestick

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pattern which is formed after the uptrend
indicating bearish reversal.

TE
It is formed by two candles, the first candle
being a bullish candle which indicates the

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continuation of the uptrend.

AR
The second candle is a bearish candle which
opens gap up but closes more than 50% of
M
the real body of the previous candle which
shows that the bears are back in the market
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and bearish reversal is going to take place.

BEARISH
O
ST
BEARISH ENGULFING

ES
Bearish Engulfing is a multiple candlestick

DG
pattern that is formed after an uptrend
indicating a bearish reversal.

TE
It is formed by two candles, the second
candlestick engulfing the first candlestick.

KE
The first candle being a bullish candle

AR
indicates the continuation of the uptrend.
The second candlestick chart is a long
M
bearish candle that completely engulfs the
first candle and shows that the bears are
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BEARISH
back in the market.
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THE EVENING STAR

ES
The Evening Star is multiple candlestick

DG
pattern which is formed after the uptrend
indicating bearish reversal.

TE
It is made of 3 candlesticks, first being a
bullish candle, second a doji and third being

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a bearish candle.

AR
The first candle shows the continuation of
the uptrend, the second candle being a doji
M
indicates indecision in the market, and the
third bearish candle shows that the bears
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are back in the market and reversal is going

to take place.
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BEARISH
The second candle should be completely out
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of the real bodies of first and third candle.

THREE BLACK CROWS

ES
The Three Black Crows is multiple

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candlestick pattern which is formed after an
uptrend indicating bearish reversal.

TE
These candlesticks are made of three long
bearish bodies which do not have long

KE
shadows and open within the real body of
the previous candle in the pattern.

AR
M
O CK

BEARISH
ST
BLACK MARUBOZU

ES
The Black Marubozu is a single candlestick

DG
pattern which is formed after an uptrend
indicating bearish reversal.

TE
This candlestick chart has a long bearish
body with no upper or lower shadows which

KE
shows that the bears are exerting selling
pressure and the markets may turn bearish.

AR
At the formation of this candle, the buyers
M
should be caution and close their buying
position.
O CK

BEARISH
ST
THREE INSIDE DOWN

ES
The Three Inside Down is multiple

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candlestick pattern which is formed after an
uptrend indicating bearish reversal.

TE
It consists of three candlesticks, the first
being a long bullish candle, the second

KE
candlestick being a small bearish which
should be in the range the first candlestick.

AR
The third candlestick chart should be a long
M
bearish candlestick confirming the bearish
reversal.
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The relationship of the first and second

candlestick should be of the bearish Harami BEARISH
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candlestick pattern.
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BEARISH HARAMI

ES
The Bearish Harami is multiple candlestick

DG
pattern which is formed after the uptrend
indicating bearish reversal.

TE
It consists of two candlesticks, the first
candlestick being a tall bullish candle and

KE
second being a small bearish candle which
should be in the range of the first

AR
candlestick chart. M
The first bullish candle shows the
continuation of the bullish trend and the
CK

second candle shows that the bears are back

in the market.
O

BEARISH
ST
TWEEZER TOP

ES
The Tweezer Top pattern is a bearish reversal

DG
candlestick pattern that is formed at the end
of an uptrend.

TE
It consists of two candlesticks, the first one
being bullish and the second one being

KE
bearish candlestick.

AR
Both the tweezer candlestick make almost or
the same high. M
When the Tweezer Top candlestick pattern is
formed the prior trend is an uptrend. BEARISH
CK

A bullish candlestick is formed which looks

O

like the continuation of the ongoing uptrend.

ST
THREE OUTSIDE DOWN

ES
The Three Outside Down is multiple

DG
candlestick pattern which is formed after an
uptrend indicating bearish reversal.

TE
It consists of three candlesticks, the first being
a short bullish candle, the second candlestick

KE
being a large bearish candle which should
cover the first candlestick.

AR
The third candlestick should be a long bearish
M
candlestick confirming the bearish reversal.
BEARISH
O CK
ST
FALLING THREE METHODS

ES
The “falling three methods” is a bearish, five

DG
candle continuation pattern which signals an
interruption, but not a reversal, of the ongoing

TE
downtrend.
The candlestick pattern is made of two long

KE
candlestick charts in the direction of the trend
i.e downtrend at the beginning and end, with

AR
three shorter counter‐trend candlesticks in
the middle.
M
BEARISH
O CK
ST
RISING THREE METHODS

ES
The “rising three methods” is a bullish, five

DG
candle continuation pattern which signals an
interruption, but not a reversal, of the ongoing

TE
uptrend.
The candlestick pattern is made of two long

KE
candlesticks in the direction of the trend i.e
uptrend in this case. at the beginning and end,

AR
with three shorter counter‐trend candlesticks
in the middle.
M
CK
BULLISH
O
ST
UPSIDE TASUKI GAP

ES
It is a bullish continuation candlestick pattern

DG
which is formed in an ongoing uptrend.
This candlestick pattern consists of three candles,

TE
the first candlestick is a long‐bodied bullish
candlestick, and the second candlestick is also a

KE
bullish candlestick chart formed after a gap up.

AR
The third candlestick is a bearish candle that
closes in the gap formed between these first two
M
bullish candles.
O CK

BULLISH
ST
DOWNSIDE TASUKI GAP

ES
It is a bearish continuation candlestick pattern

DG
which is formed in an ongoing downtrend.
This candlestick pattern consists of three candles,

TE
the first candlestick is a long‐bodied bearish
candlestick, and the second candlestick is also a

KE
bearish candlestick formed after a gap down.

AR
The third candlestick is a bullish candle that
closes in the gap formed between these first two
M
bearish candles.
O CK
ST

BEARISH
MAT-HOLD

ES
A mat hold pattern is a candlestick formation

DG
indicating the continuation of a prior trend.
There can be either bearish or bullish mat hold

TE
patterns.

KE
A bullish pattern begins with a large bullish
candle followed by a gap higher and three smaller

AR
candles which move lower.
M
O CK

BULLISH
ST
ST
OCK
M
AR
KE
TE
DG
CHART PATTERNS

ES
What is a CHART PATTERN?

ES
Stock chart patterns are an important trading tool that should be utilised as

DG
part of your technical analysis strategy.
From beginners to professionals, chart patterns play an integral part when

TE
looking for market trends and predicting movements.

KE
They can be used to analyse all markets including forex, shares, commodities
and more.

AR
The following stock chart patterns are the most recognisable and common
chart patterns to look out for when using technical analysis to trade the
M
financial markets.
O CK
ST
ASCENDING TRIANGLE

ES
The ascending triangle is a bullish ‘continuation’ chart pattern that signifies a

DG
breakout is likely where the triangle lines converge.
To draw this pattern, you need to place a horizontal line (the resistance line) on

TE
the resistance points and draw an ascending line (the uptrend line) along the
support points.

KE
AR
M
BULLISH
O CK
ST
DESCENDING TRIANGLE

ES
Unlike ascending triangles, the descending triangle represents a bearish

DG
market downtrend.
The support line is horizontal, and the resistance line is descending, signifying

TE
the possibility of a downward breakout.

KE
AR
M
BEARISH
O CK
ST
SYMMETRICAL TRIANGLE

ES
For symmetrical triangles,

DG
two trend lines start to meet
which signifies a breakout in

TE
either direction.
The support line is drawn

KE
with an upward trend, and
the resistance line is drawn

AR
with a downward trend. M
Even though the breakout
can happen in either
CK

direction, it often follows the

general trend of the market.
O
ST
PENNANT

ES
Pennants are represented by two lines that meet at a set point.

DG
They are often formed after strong upward or downward moves where traders
pause and the price consolidates, before the trend continues in the same

TE
direction.

KE
AR
M
O CK
ST
FLAG

ES
The flag stock chart pattern is shaped as a sloping rectangle, where the support

DG
and resistance lines run parallel until there is a breakout.
The breakout is usually the opposite direction of the trendlines, meaning this is

TE
a reversal pattern.

KE
AR
M
O CK
ST
WEDGE

ES
A wedge pattern represents a tightening price movement between the support

DG
and resistance lines, this can be either a rising wedge or a falling wedge.
Unlike the triangle, the wedge doesn’t have a horizontal trend line and is

TE
characterised by either two upward trend lines or two downward trend lines.

KE
For a downward wedge, it is thought that the price will break through the
resistance and for an upward wedge, the price is hypothesised to break

AR
through the support.
This means the wedge is a reversal pattern as the breakout is opposite to the
M
general trend.
O CK
ST
 WEDGE

ST
OCK
M
AR
KE
TE
DG
ES
DOUBLE BOTTOM

ES
A double bottom looks similar to the letter W and indicates when the price has

DG
made two unsuccessful attempts at breaking through the support level.
It is a reversal chart pattern as it highlights a trend reversal. After

TE
unsuccessfully breaking through the support twice, the market price shifts
towards an uptrend.

KE
AR
M
BULLISH
O CK
ST
DOUBLE TOP

ES
Opposite to a double bottom, a double top looks much like the letter M.

DG
The trend enters a reversal phase after failing to break through the resistance
level twice.

TE
The trend then follows back to the support threshold and starts a downward

KE
trend breaking through the support line.

AR
M
BEARISH
O CK
ST
HEAD AND SHOULDERS

ES
The head and shoulders pattern tries to predict a bull to bear market reversal.

DG
Characterised by a large peak with two smaller peaks either side, all three
levels fall back to the same support level.

TE
The trend is then likely to breakout in a downward motion.

KE
AR
M
BEARISH
O CK
ST
ROUNDING TOP OR BOTTOM

ES
A rounding bottom

DG
or cup usually
indicates a bullish

TE
upward trend,
whereas a rounding

KE
top usually indicates
a bearish downward

AR
trend.
Traders can buy at
M
the middle of the U
CK
shape, capitalising
on the trend that
O

follows as it breaks
through the
ST

resistance levels.
CUP AND HANDLE

ES
The cup and handle is a

DG
well‐known
continuation stock chart

TE
pattern that signals a
bullish market trend. It

KE
is the same as the above
rounding bottom, but

AR
features a handle after
the rounding bottom.
M
The handle resembles a
flag or pennant, and
CK

once completed, you can

see the market breakout
O

in a bullish upwards
ST

trend.
What is a TRENDLINE?

ES
Trendlines are easily recognizable lines that traders draw on charts to

DG
connect a series of prices together or show some data's best fit.
The resulting line is then used to give the trader a good idea of the direction

TE
in which an investment's value might move.

KE
A trendline is a line drawn over pivot highs or under pivot lows to show the
prevailing direction of price.

AR
Trendlines are a visual representation of support and resistance in any time
frame.
M
They show direction and speed of price, and also describe patterns during
CK
periods of price contraction.
O
ST
ST
OCK
M
QUERIES?
AR
KE
TE
DG
ES