Technical Analysis of Reversal Chart Setups

Reversal Trading Setups confirm the reversal of the stock indices trading market indices trend once this reversal Indices Trading stock indices pattern setup is confirmed.

How to Analyze Reversal Chart Setups

These reversal Indices Trading stock indices patterns are formed after extended stock indices market indices trend either upwards or downward & these reversal stock indices chart patterns signal that the stock indices trading market indices trend is ready to reverse.

Reversal Trading Setups

• Double Top Reversal Chart Setups

• Double Bottom Reversal Chart Setups

• Head & Shoulders Reversal Chart Setups

• Reverse Head & Shoulders Reversal Chart Setups

Double Top Trading Pattern Technical Analysis

Double tops stock indices pattern is a reversal stock indices pattern which forms after an extended up-ward indices trend. As its name implies, this pattern is made up of 2 consecutive peaks that are roughly equal, with a moderate trough between.

How to Analyze Double Tops Reversal Chart Setups

Double tops stock indices pattern formation is considered complete once stock indices price makes the second peak & then penetrates the lowest point between the highs, called the neckline. The sell stock indices signal from this formation occurs when the stock indices market breaks-out below the neckline.

In Indices, double tops stock indices pattern formation is used as a early warning signal that a bullish Indices trend is about to reverse. However, it's only confirmed once the neck line is broken and the stock indices trading market moves below the neck line. Neckline is just another term for last support level formed on Indices chart.

Summary:

• Double tops stock indices pattern forms after an extended move upward
• Double tops stock indices chart setup formation indicates that there will be a reversal in stock indices trading market
• We sell when stock indices price breaks out below the neckline: see below for the explanation.

How to Interpret Double Top Reversal Chart Patterns? - Double Tops Technical Analysis

Double Bottom Chart Pattern Technical Analysis

Double bottom stock indices pattern is a reversal stock indices chart setup which forms after an extended down-wards indices trend. It is made up of two consecutive troughs that are roughly equal, with a moderate peak between.

How to Analyze Double Bottoms Reversal Chart Setups

Double bottom stock indices pattern formation is considered complete once stock indices price makes the second low & then penetrates the highest point between the lows, called the neckline. The buy indication from this bottoming out signal occurs when stock indices trading market breaks-out the neckline to the upside.

In Indices, double bottoms stock indices pattern formation is an early warning signal that the bearish Indices trend is about to reverse. It's only considered complete/completed once the neckline is broken. In this formation the neck line is the resistance area for the indices price. Once this resistance is broken the stock indices trading market will move up.

Summary:

• Double bottom stock indices trading pattern forms after an extended move downward
• Double bottom stock indices chart setup formation indicates that there will be a reversal in stock indices trading market
• We buy when stock indices trading price breaks out above neckline: see below for an explanation.

How to Interpret Double Bottoms Reversal Chart Patterns? - Double Bottom Technical Analysis

Head & Shoulders Stock Indices Chart Pattern Technical Analysis

Head & Shoulders stock indices pattern is a reversal stock indices pattern which forms after an extended Indices upwards trend. It's made up of 3 consecutive peaks, the left shoulder, head and the right shoulder with two moderate troughs between the shoulders.

How to Analyze Head & Shoulders Reversal Chart Setups

Head & Shoulders stock indices chart setup is considered to be complete once stock indices price penetrates & moves below the neck line, which is drawn by joining these two troughs between the shoulders.

To go short, Indices traders place their sell stop pending orders just below neckline.

Summary:

• Head & Shoulders stock indices pattern forms after an extended move upward
• Head & Shoulders stock indices chart setup formation indicates that there will be a reversal in stock indices trading market
• Head & Shoulders stock indices chart pattern formation resembles head with shoulders thus its name.
• To draw the neck-line we use chart point 1 and point 2 as shown below. We also extend this line in both directions.
• We sell when stock indices price breaks out below the neckline: see the chart below for explanation.

How to Interpret Head & Shoulders Reversal Patterns? - Head & Shoulders Technical Analysis

Reverse Head & Shoulders Stock Indices Chart Pattern Technical Analysis

Reverse Head & Shoulders stock indices chart setup is a reversal head and shoulders stock indices pattern which forms after an extended Indices Trading downwards trend. It resembles an upside down head shoulders.

How to Analyze Reverse Head & Shoulders Reversal Chart Setups

Reverse Head & Shoulders stock indices chart setup is considered to be complete once stock indices price penetrates above the neckline, which is plotted by joining these two peaks between the reverse shoulders pattern.

To go long buyers place their buy stop orders just above neckline.

Summary:

• Reverse Head & Shoulders stock indices trading pattern forms after an extended move downward
• Reverse Head & Shoulders stock indices chart setup formation indicates that there will be a reversal in stock indices trading market
• Reverse Head & Shoulders stock indices chart pattern formation resembles is upside-down, therefore the name Reverse.
• We buy when stock indices trading price breaks-out above neckline: see the chart below for explanation.

How to Analyze Reverse Head & Shoulders Reversal Patterns? - Inverse Head & Shoulders Technical Analysis

How to Analyze Reversal Stock Indices Patterns - Reversal Chart Patterns