When we "read" the stock market we are really looking at patterns.

What are patterns?(From Investopedia)

Patterns are the distinctive formations created by the movements of security prices on a chart and are the foundation of technical analysis.

When a price patterns signals a change in trend direction it's a reversal pattern.

When a price pattern continues in its existing direction, it is a continuation pattern.

Pennants:

Pennants are a type of continuation pattern drawn with 2 trendlines that eventually converge. This is an example of a bullish pennant.(Upward trending price)

Flags:

Flags are also a continuation pattern that uses 2 parrallel trendlines that can slope up or down. If a flag is bullish, it is usually a break in an down trend market. If it is bearish(slope down) like in this example, it is usually a break in an up treand market.

I think this is a good place to stop after covering some basics of trends in the market. Recently I have not played alot of volleyball so I am currently trying to play as much as I can. I am dreading August because I will have to study hard for the SAT while completing my AP computer science class which is annoying. Next blog I want to learn about some stocks that are currently performing well.