{"id":6756,"date":"2011-07-24T17:24:53","date_gmt":"2011-07-24T11:54:53","guid":{"rendered":"index.php\/2011\/07\/24\/the-psychology-of-technical-analysis-ch-12-13\/"},"modified":"2011-07-24T17:24:53","modified_gmt":"2011-07-24T11:54:53","slug":"the-psychology-of-technical-analysis-ch-12-13","status":"publish","type":"post","link":"https:\/\/stockviz.biz\/index.php\/2011\/07\/24\/the-psychology-of-technical-analysis-ch-12-13\/","title":{"rendered":"The Psychology of Technical Analysis: Ch. 12-13"},"content":{"rendered":"

There are three categories of price patterns that yield profitable signals.<\/p>\n

Trend-line<\/a> break<\/h3>\n

This signal is given when the market price level penetrates the extension of a straight line drawn through successive troughs (in a rising market) or successive peaks (in a falling market).<\/p>\n

\"EMC<\/h3>\n

 <\/h3>\n

\"Amazon.com,<\/h3>\n

 <\/p>\n

Head and Shoulders<\/a><\/h3>\n

\"CNET<\/a>The H&S formation is similar in shape to a silhouette of a person\u2019s head and shoulders. In the case of a top formation, the \u2018left shoulder<\/strong>\u2019 is formed by the period of price weakness just prior to the market moving to a new high; the \u2018head<\/strong>\u2019 is formed by the new high itself; and the \u2018right shoulder<\/strong>\u2019 is formed by a period of price strength just after the new height. The base of both the left and right shoulder occur at roughly the same price levels \u2013 you can draw a \u2018neckline<\/strong>\u2019 between the two. A sell<\/em> signal is generated when prices penetrate<\/em> the neckline.<\/p>\n

Multiple top\/bottom<\/h3>\n

\"Gillette<\/p>\n

A trading signal is generated when the price bounces away from a particular level at least twice<\/em>. At market peaks, such a pattern is called the double top<\/strong>. <\/p>\n

This is one of a <\/font><\/em>series of posts<\/font><\/em><\/a> reviewing The Psychology of Technical Analysis by Tony Plummer.<\/font><\/em><\/p>\n

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