Chart patterns emerge through price development over time and signal either trend reversals or trend continuations.
Head & Shoulders
The most reliable reversal pattern after an uptrend: three highs, the middle one (head) higher than the two shoulders. The neckline connects the two lows between the highs.
| Variant | Signal | Price target after break |
|---|---|---|
| H&S (after uptrend) | 📉 Bearish | Neckline − head-neckline distance |
| Inverse H&S (after downtrend) | 📈 Bullish | Neckline + head-neckline distance |
| Double Top | 📉 Bearish | Low − (High − Low) |
| Double Bottom | 📈 Bullish | High + (High − Low) |
| Triple Top | 📉 Bearish | Support − (High − Support) |
| Triple Bottom | 📈 Bullish | Resistance + (Resistance − Low) |
| Rounding / Saucer Bottom | 📈 Bullish | Rim of the saucer + saucer depth |
| V-Formation / Spike | ↔️ Either | No measured target — abrupt reversal |
Beyond Head & Shoulders and the double top/bottom, there are further reversal patterns: the triple top/bottom is the triple variant of the double pattern — three failed attempts at the same level form an especially strong barrier. The rounding/saucer bottom is a slow, bowl-shaped basing process with no sharp turning point, typical for defensive or illiquid names. The V-formation (spike) is the opposite: an abrupt reversal with no warning, usually after a news shock — hard to trade because the signal is only clear in hindsight.