Bse charts represent the movement of stocks which are listed in Bombay Stock Exchange in the form of graph. There are more than 5000 stocks listed in BSE. Though different studies can be adopted to predict BSE charts, two important of them are reversal patterns and continuation patterns.
Reversal patterns exist when markets are about to take U-turns on positional or intraday charts and continuous patters occur when markets (Eg: nifty intraday) remain idle and regain its momentum in the ongoing direction again.
|Reversal Patterns||Continuation Patterns|
|Double top||Pennant Pattern|
|Double bottom||Flag Pattern|
|Head and Shoulders Top||Symmetric Triangle|
|Head and Shoulders bottom||Ascending triangle|
|Falling wedge||Descending triangle|
|Rounding bottom||Price Channel|
|Rounding top||Measured move – Bullish|
|Triple top||Measured move – Bearish|
|Triple Bottom||Cup with handle|
Double Top: A double top shape similar to head and shoulder is formed at the top of the nifty charts before nifty takes U-turn and forms a bearish trend.
Double Bottom: Just as we discussed double top, double bottom too is formed during the trend reversal but from bearish to bullish. This type of phenomenon can be observed at the lower side of the nifty live chart.
Head and shoulders Top: This shape is similar to the upper portion of a human being, two shoulders with a head in the middle. It is said that these shapes are important to be observed in weekly charts. This forms at the top when markets turn from bullish to bearish phase.
Head and shoulders bottom: This type of pattern can also be called as inverted head and shoulder. This shape forms when the chart like nifty future chart is about to take a bull move.
Falling wedge: The shape of the falling wedge would resemble a falling triangle and the break out of the triangle in the upper direction may lead the markets to move up.
Rising Wedge: On intraday nifty chart, the rising wedge triangle looks upward as long as the markets move in the upward direction and once the stock cuts the range, the stock is expected to fall.
Rounding Bottom: Rounding bottom forms a half rounded shape at the bottom like an extended letter ‘U’ on nifty intraday chart. Breakage of upper boundaries may lead the market to bullish phase.
Rounding Top: Just inverse of rounding bottom is rounding top. This forms when markets rise to certain extent and are about to fall.
Triple Top: When the stock takes resistance at 3 different and immediate points, it is said that the nifty might fail to cross the before resistance level and may fall starting a reversal trend on live nifty chart.
Triple Bottom: When the stock finds 3 support levels failing to cut them, then it starts rising by taking a strong support at the before failed level.