A chart pattern used in technical analysis which is identified by price movements that, when graphed, form the shape of an upside down "U". A rounding top may form at the end of an extended upward trend and indicates a reversal in the long-term price movement. The pattern can develop over several weeks, months or even years, and is considered a rare occurrence by many traders.The chart below illustrates a rounding top. This pattern is also described as an inverse saucer. A rounding top represents a sell signal to technical analysts. The initial upwards trend becomes exhausted as the demand for the stock dries up. The reversal to the downward slope of the rounding top indicates that demand has tapered off and a surplus supply is present, basically there are more sellers than buyers. A rounding top represents a bearish take on the stock.
A chart pattern used in technical analysis, which is identified by a series of price movements that, when graphed, form the shape of a "U". Rounding bottoms are found at the end of extended downward trends and signify a reversal in long-term price movements. This pattern's time frame can vary from several weeks to several months and is deemed by many traders as a rare occurrence.The chart below illustrates a rounding bottom. A rounding bottoms look similar to the cup and handle pattern, but does not experience the temporary downward trend of the "handle" portion. The initial declining slope of a rounding bottom indicates an excess of supply, which forces the stock price down. The transfer to an upward trend occurs when buyers enter the market at a low price, which increases demand for the stock. once the rounding bottom is complete, the stock breaks out and will continue in its new upward trend.
A bullish candlestick pattern that is used to predict the continuation of the current uptrend. This pattern is formed when the candlesticks meet the following characteristics:1. The first candle in the pattern is a long white candlestick within a defined uptrend.2. A series of descending small-bodied candlesticks that trade within the range of the first candlestick.3. A long white candlestick creates a new high, which suggests that bullish are back in control of the direction. The series of small-bodied candlesticks are regarded as a period of consolidation before the uptrend is able to continue. This pattern is important because it shows traders that sellers still do not have enough conviction to reverse the trend and it is used by some active traders as a signal to add to their positions.
A pattern on a security's chart that results from the daily low price rising over time, creating a series of ascending troughs. Technical traders use this pattern to confirm that the trend of the underlying security is heading upward. The chart below illustrates a security that has three rising bottoms, indicating progressively higher lows over time. Also known as "ascending bottom". This pattern is considered to be bullish. Rising bottoms signify increasing basic support levels and ascending tops.
A price level predetermined as the point of entry into a specific security, stock, or currency. once the setup price is broken the trader will enter the position determined by the setup. This could include shorting a stock because they think the price will drop or going long because they expect an upward movement. The setup price can be determined based on technical or fundamental factors as well as personal opinion on the part of the trader. Usually reaching the setup price is not enough to make a move. Generally traders wait for a significant break to confirm the trend will continue. For example, if you’re looking for the price of a stock to go above $25 before buying, the setup price is $25. It might be better for the price to exceed $25.05 instead of purchasing as soon as $25 is reached. Timing will depend on volume, volatility and many other factors affecting price movements.
A general term used to describe indicators that gauge investor attitudes toward the market. Sentiment indicators are employed in technical analysis to quantify the levels of optimism or pessimism present in various markets. For example, some indicators will account for all the long and short positions on a particular exchange in order to determine a bearish or bullish market.
A component of the Ichimoku Kinko Hyo indicator that is used to create the 'cloud' of the indicator. Senkou span B is always plotted alongside Senkou span A and the area between the two lines is shaded. The shaded area, known as the cloud, is then used to give traders an idea of future support and resistance. Senkou span B is calculated by using the following formula:Senkou span B is generally regarded as the slowest moving component of the Ichimoku indicator because it is created by using the greatest number of time periods in its calculation (generally 52 time periods). The trend is deemed to be downward when Senkou span A is located below senkou span B. In practice, the indicator is most commonly used to predict the reversal of a current trend when the two senkou spans cross over each other.
A ratio comparing the number of short sales made by specialists versus the total number of short sales transacted on the market. This ratio is a sentiment indicator. It specifically designed to isolate the bearish or bullish attitudes of professional traders by eliminating excess noise.