Chart Patterns

What this video covers

• Why a head and shoulders pattern is NOT confirmed until price breaks the neckline with increased volume, and what the three peaks alone actually mean (nothing)
• The four reversal patterns and their directional bias: head and shoulders (bearish), inverted head and shoulders (bullish), saucer or rounding bottom (bullish), and inverted saucer or rounding top (bearish)
• How continuation patterns (consolidation, flags, pennants) signal the prior trend will resume, not reverse
• The distinction between a flag (small rectangle sloping against the trend) and a pennant (small symmetrical triangle after a sharp move)
• Why stabilization by the managing underwriter is a legal form of price manipulation explicitly permitted under Securities and Exchange Commission (SEC) rules during the distribution period
• The hard rule that a stabilizing bid must be placed at or below the public offering price, never one cent above
• How to spot the classic exam trap that frames consolidation as a coming reversal, or stabilization as a violation