The stock market exhibits several recurring patterns that traders and analysts use to predict future price movements. Some common patterns include:
1. **Head and Shoulders** - A reversal pattern with three peaks (left shoulder, head, right shoulder), signaling a potential trend change from bullish to bearish.
2. **Double Top/Bottom** - Two peaks (top) or troughs (bottom) indicating resistance or support levels before a reversal.
3. **Cup and Handle** - A bullish continuation pattern where a rounded "cup" forms, followed by a smaller downward "handle" before breaking upward.
4. **Triangles (Ascending/Descending/Symmetrical)** - Consolidation patterns that break out in the direction of the prevailing trend.
5. **Flags and Pennants** - Short-term continuation patterns where prices consolidate after a sharp move before resuming the trend.
6. **Engulfing Patterns (Bullish/Bearish)** - Candlestick patterns where one candle completely "engulfs" the previous one, indicating strong reversal momentum.
7. **Morning/Evening Star** - Three-candle reversal patterns signaling a potential trend shift (morning star = bullish, evening star = bearish).
8. **Fibonacci Retracements** - Not a visual pattern, but price often retraces to key Fibonacci levels (38.2%, 50%, 61.8%) before continuing the trend.
These patterns are not guarantees but tools for probabilistic analysis, often used alongside volume, indicators (RSI, MACD), and broader
market context.
