Bar Chart formations?
The bar chart is the most common form of chart associated with stocks. A bar chart consists of open, high, low and closing prices plotted on a series of vertical lines. The following charts are examples of bar chart formations that frequently occur and are very reliable in predicting future price direction of a stock or index. Cup And Handle Formations: This is a classic bullish formation that typically occurs after a stock has experienced a long and significant decline. Once the stock hits bottom, it enters a base building period in which there is little price movement over an extended period of time. This is referred to as the Cup. At some point, the stock experiences a sharp price rise followed by a small correction and then another price increase. This action is referred to as the Handle. The buy signal is given after the correction when price breaks out above the previous rallies high. Gaps: An up gap occurs on a stocks chart when the stocks opening price is higher than the previo
