the hAnDbook of teChniCAl AnAlysis■ (^) Diamond formations
■ (^) Expanding (broadening) formations
The following chart patterns are regarded as continuation chart patterns:
■ (^) Bullish pennants and flags in uptrends
■ (^) Bearish pennants and flags in downtrends
■ (^) Symmetrical triangles in uptrends and downtrends
■ (^) Horizontal channels in uptrends and downtrends
■ (^) Ascending triangles in uptrends
■ (^) Descending triangles in downtrends
■ (^) Inverted head and shoulders in uptrends
■ (^) Standard head and shoulders in downtrends
■ (^) Falling wedges in uptrends
■ (^) Rising wedges in downtrends
Consolidation and non‐Consolidation patterns
Most chart patterns are regarded as consolidation patterns. This is because for a
chart pattern to form, price has to decelerate and remain within some confined
region of price. A few exceptions are V‐tops and V‐bottoms. These V‐patterns are
not usually regarded as consolidation patterns as they do not decelerate and then
range within a certain region of price. On the contrary, they reverse very abruptly
and begin to trend strongly in the opposite direction. Refer to Figure 13.1 for a
summary of chart pattern classifications.
figUre 13.1 Classifications of Chart Patterns.