Since all market indexes and stocks are falling sharply, it is hard to find chart patterns in the 1-hour or even 4-hour charts. We’ve decided to focus today on chart patterns in bigger timeframes as the daily and weekly charts.
First thing we can see is that Goldman Sachs stock has recently broken a descending triangle pattern which is a strong bearish pattern.
We will enter a short trade in case price pulls back to the lower trend line which is exactly at the psychological level of 127.00. These patterns are extremely reliable, reaching up to 82% win rate and this particular one has a profit target of $64.54 – which can give us amazing risk:reward ratio. Stay tuned.
In Google stock we can see the exact opposite: an ascending triangle pattern. As opposed to regular triangle chart pattern which is pretty useless in trading and in predicting the direction of price, the ascending\descending variations are quite reliable and can be very good signals to trade.
This particular one is a strong bullish pattern that suggests that price will break upwards and continue the uptrend.
We will enter the market at several points: If price will hit the lower trend line and create a reversal candlestick formation, we will enter a long trade.
Also, when price breaks the resistance trend line (at psychological level of 632.00), we will wait for the pullback to enter the trade and join at a low risk-high reward point.
The size of this particular pattern is $219 (distance between the upper trend line and the lower one), so the price target of this pattern is $851.
It’s worth noting that we will not trade a breakout of the lower trend line, so if price breaks downwards we will not enter a trade, not even the pullback trade. These are unreliable trading signals that you shouldn’t trade.