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HomeChart AnalysisIdentify a bullish trend in stock market analysis.

Identify a bullish trend in stock market analysis.

Learn how the chart pattern works. The article describes the most important bullish chart and candlesticks pattern.

Time the Bullish trend

In layman’s terms, a bullish trend is when the market moves up. However, if the upward movement is temporary and exists for a short period, it is not a bullish trend. A bullish trend lasts at least a year or more. The world’s greatest investors wait for the right time to invest, and some investors like Warren Buffet try to invest in future fundamentals. Good fundamentals will always drive the market above. Sometimes we need to learn to time the market as well.

By learning the technical analysis one can see through the bullish pattern. The learning curve of the stock chart is like chess, one needs time to master.

Bullish chart pattern

Inverse head and shoulder

When the first resistance is repeated after the second resistance the chart pattern forms the inverse head and shoulder pattern. To grasp this formation, see the pattern in downward momentum. It is the inverse of bearish head and shoulder.

Inverse head and shoulder pattern

The first resistance will be the first shoulder, then the second resistance which will go even lower than the first after the spike will be the head. After forming the head the line goes up and falls again on the level of the first resistance which makes the third shoulder. The 3 resistance makes the inverse head and shoulder pattern.

Saucer formation or Rounding bottom

The saucer formation pattern takes the arc path. Also known as rounding bottom, the bullish movement after the completion of the pattern is almost imminent.

Rounding bottom or Saucer pattern

This first phase of this pattern exists when there is a gradual increase in supply, in other words, the increase in sellers. The middle phase is when the demand starts to replace the supply. The final phase is when the buyers are high in numbers or the demand increases.

Cup and handle pattern

Founded by William O Neil, this pattern is important for traders because of its imminent nature. There always exists this pattern at the start of a bull market.

Cup and handle pattern

The cup and handle pattern is the round bottom pattern with the extension of the handle-like pattern at the end of the rounded tip. After the completion of the cup arc, the market trend goes down again for a short period. Then the new rise breaks the old resistance. The total pattern completes the cup and handles formation.

Double bottom

The double bottom is more assertive than the “Cup and Handle” pattern. Double bottom exists when the downtrend market falls back to hit the same resistant level twice.

Double bottom pattern

It also indicates the rise in buyers at a particular level. The double bottom will always have this specific pattern where it falls and rebounds and falls at the same level again and then rebounds even higher than before.

The double bottom works even better when the whole market patterns have bullish anticipation. The prediction of a double bottom pattern most likely works in a 1-day time frame rather than in 1 minute or 3-minute time frame.

Triple bottom

The triple bottom is a strong pattern that hints the bull market is near. When the double bottom pattern fails, the chart forms the triple bottom pattern.

Triple bottom pattern

The line hits the support level three times in a random period before the great breakout. One of the important points to remember is that the pattern shall form after a long period of a bear market.

Bullish Wedge

To understand the bullish wedge we need to know about the stock volatility. As the price falls, the stock becomes less volatile and forms a narrow upward and downward movement with a steady decline.

Bullish wedge pattern

Always remember to see the volume of the particular time as well. When the top and bottom start to meet there will be a bullish move completing a bullish wedge pattern.

Bullish Candlestick Pattern

The candlestick pattern is different from the line chart pattern. In a line chart pattern, we see the whole bullish and bearish pattern as a whole chart at a longer time frame. In an analysis of candlesticks, we look into a shorter time frame. Although the pattern can form in a week and month timeframe, it is the traders take the candlestick signs very seriously.

Bullish Spinning Top

When the closing price is higher than the opening price because of the bullish push then the bullish spinning top candle is formed. This candlestick shows the bull is winning against the bearish pull and indicates the trend reversal.

Hammer

The hammer forms when the candle maintains a bullish movement. The opening price rises higher than the day’s low which creates the hammer sign and the closing price remains higher than the opening. The hammer pattern supports bullish momentum.

Bullish Engulfing

When the opening remains lower than the previous day but the closing price remains higher then such a pattern is called Bullish engulfing. The closing price always remains higher the next day in a bullish engulfing pattern. The pattern performs like a hammer but with a wide gap between the opening and closing price.

Inverted Hammer

In this pattern the gap between open and close is small and the open price remains near the day’s low. This pattern happens when the buyer pushes the price up and the day high remains higher than the opening price. In other words, the inverted hammer is also called a shooting star. In a bullish chart, the closing price is higher than the open and in a bearish chart, the closing price remains lower than the open. An inverted hammer is an important pattern that signifies the trend reversal.

Morning Star

The morning star pattern occurs in the middle of the red and the green candle. It’s a three-candle pattern that signifies the bullish trend. This candle exists when the chart pattern hits the absolute bottom. The day’s high and low remains significantly small and the close remains closer to the open.

Piercing Line

In the piercing line pattern, the closing price of the second candle remains higher than the previous price. This pattern follows a two-day candlestick. The first candle has an opening price closer to the day’s high and closing near the day’s low, while the second candle remains green with a closing price near the day’s high.

Morning Doji Star

A Morning Doji Star is a three-day candlestick pattern just like a morning star. The difference between the two is that the middle candle in Morning Doji Star forms a Doji where the opening and closing price remains almost equal.

Three White Soldiers

The three white soldiers occur at the start of the bull market. With three green candles after the red, the upward momentum becomes imminent traders are likely to search for this pattern in their analysis. The opposite of the three white soldiers is called the three black crows. Also, remember the three white soldier is a strong signal for the upcoming rise in the market.

Andy Smith
Andy Smithhttps://www.quora.com/profile/Andy-Smith-2439
Andy Smith has been writing about finance for many years. Andy also has a team of experienced and accomplished financial writers, having registered for various outlets, including newspapers, magazines, websites, and blogs. Hajarkitta.com has brought prime writers who have graduated from college with Masters's degrees in Literature, economics, and finance. After graduating, Andy worked for a few years in the corporate world but soon realized his genuine passion was writing. He also began freelancing and soon found himself writing about finance and other economic topics.
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