THE CHANNEL PATTERN

Channel Patterns should generally be considered as a continuation patterns. They are indecision areas that are usually resolved in the direction of the trend. Research has shown that this is true far more often than not, of course, the trendlines run parallel in a rectangle. Supply and demand seems evenly balanced at the moment. Buyers and sellers also seem equally matched. The same 'highs' are constantly tested, as are the same 'lows'. The stock vacillates between two clearly set parameters.
While volume doesn't seem to suffer like it does in other patterns, there usually is a lessening of activity within the pattern. But like the others, volume should noticeably increase on the breakout.

HERE IS A SAMPLE CHART WITH A CHANNEL FORMATION

THE WEDGE FORMATION PATTERN

The Wedge Formation is also similar to a symmetrical triangle in appearance, in that they have converging trendlines that come together at an apex. However, wedges are distinguished by a noticeable slant, either to the upside or to the downside. As with triangles, volume should diminish during its formation and increase on its resolve.

The Following is a Typical Wedge Formation Trend Pattern
" A falling wedge is generally considered bullish and is usually found in up-trends. But it can also be found in downtrends as well. The implication however is still generally bullish. This pattern is marked by a series of lower tops and lower bottoms.
" A rising wedge is generally considered bearish and is usually found in downtrends. They can be found in uptrends too, but would still generally be regarded as bearish. Rising wedges put in a series of higher tops and higher bottoms.

THE PARABOLIC CURVE PATTERN

The Parabolic Curve is probably one of the most highly prized and sought after pattern. This pattern can yield you the biggest and quickest return in the shortest possible time. Generally you will find a few of these patterns at or near the end of a major market advance. The pattern is the end result of multiple base formation breaks.

HERE IS A SAMPLE CHART WITH A PARABOLIC FORMATION

THE ASCENDING TRIANGLE PATTERN

The Ascending Triangle is a variation of the symmetrical triangle. Ascending triangles are generally considered bullish and are most reliable when found in an up-trend. The top part of the triangle appears flat, while the bottom part of the triangle has an upward slant.
Hear is a Typical Ascending Triangle Pattern
" In ascending triangles, the stock becomes overbought and prices are turned back.
" Buying then re-enters the market and prices soon reach their old highs, where they are once again turned back.
" Buying then resurfaces, although at a higher level than before.
" Prices eventually break through the old highs and are propelled even higher as new buying comes in.

As in the case of the symmetrical triangle, the breakout is generally accompanied by a marked increase in volume.

THE FLAT BASE PATTERN

The Flat Base is a stock pattern that goes horizontal for any length of time. Very powerful advances can be had from this formation. What we look for is volume drying up as the stock stays at or about the same level going horizontally.
Draw a trend line across the top of this formation. As the stock proceeds through the trend line, the stock is bought as it breaks the trend line and volume increases.

HERE IS A SAMPLE CHART WITH A FLAT BASE PATTERN

THE CUP & HANDLE PATTERN

The Cup & Handle is the corrective action after a powerful stock advance. Generally a stock will have a powerful move of some 2 to 4 months, then go through a market correction. The stock will sell off into the correction in a downward fashion for maybe 20 to 35 percent off the old high point. The time factor is generally anywhere from 8 to 12 weeks depending on the overall market condition.
As the stock comes up to test the old highs, the stock will incur selling pressure by the people who bought at or near the old high. This selling pressure will make the stock price drift in a sideways fashion with a bias to the downside for about 4 days to 3 weeks.
The handle is generally about 5% below the old high point. A handle that is any lower is generally a defective stock and contains higher risk for failure.
The time to buy the stock, is as it emerges into new highs at the top of the handle and not the old high point set some 8 to 12 weeks ago.
I have found some of the biggest stock market winners have this very powerful formation. It is one of the best and most reliable formations to look for. However, it is important to note that the best stocks with this formation are found at the beginning of a market move after a good market correction, and not during, or at the end of a major market advance.

HERE IS A SAMPLE CHART WITH A CUP AND HANDLE FORMATION