Don’t waste your time – keep track of how NFP affects the US dollar!

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.

Follow us on Facebook

Beginner Forex book

Beginner Forex book will guide you through the world of trading.

The most important things to start trading
Enter your e-mail, and we will send you a free Beginner Forex book

Thank you!

We've emailed a special link to your e-mail.
Click the link to confirm your address and get Beginner Forex book for free.

FBS Mobile Personal Area

FREE - In Google Play

View
Trading
Analytics & Education
About Us
Connect to live chat
STOCKS: reversal chart patterns

STOCKS: reversal chart patterns

Information is not investment advice

Practice

On May 27, there was a notable drop in the stock market at the beginning of the American session. Later on, most stocks picked up making a quick reversal. That gives us a good opportunity to check for the reversal chart patterns and compare them between different stocks. We will take three from different market sectors to avoid industry-like pattern repetition: Amazon, Netflix, and Amazon. See below.

4.png

At the bottom of each drop, we have early signs of a bullish reversal. Amazon and Mastercard have a hammer chart formation at the bottom of the downswing. Although both hammers are of the same color as the red of the bearish candles, it may be taken as an early precursor of a possible change of market mood. Netflix, in turn, had several bullish candles in a row which laid the start of the upswing we see. 

Theory

Hammer

5.png

Hammer is useful because it is a 1-candle pattern. It does require confirmation and time-verification just as all other patterns but it is easy to pick it out from the chart because it has a very distinctive form. Works both in bullish and bearish reversals.

Three white soldiers

6.png

It doesn’t have to be exactly three – in the example of Netflix on May 27 we see series of four bullish candles in a row. The idea is that if after a large bearish move suddenly several bullish candles appear one after another, that means a high potential of a bullish reversal.

You can check the other formations in our article specifically dedicated to reversal patterns – use it and make it work for you!

                                                                                                 USE IT

Similar

Popular

Share with friends:

Choose your payment system

Visa
Mastercard
Maestro
Wire Transfer
Skrill
RAPID Transfer
NETELLER
Learn more

Callback

Please fill in the form below so we can contact you

Select the best time for us to call you. We give calls from Monday to Friday in suggested intervals. In case we couldn't get through, we will try again at the same time the next day. For getting real-time assistance, use FBS chat.

We provide only English-speaking callbacks. If you prefer any other languages, contact the support team.

We will call you at the time interval that you chose

Change number

Your request is accepted.

We will call you at the time interval that you chose

Next callback request for this phone number will be available in 00:30:00

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later