BETA Investment Group

Bearish Reversal Patterns are universal patterns that candlesticks can follow that signify a change from an upwards movement to a downwards movement of share price. Identifying these patterns may help when trying to predict if the stock should be sold, or if there is a good buying opportunity in the future. However, it is important to remember that even though a pattern begins to form, it does not always need to finish. There is no guarantee that a pattern will follow through to the end. With that being said, here are some of the most popular Bearish Reversal Patterns: Double Top     Above is an example of the Double Top pattern. Keep in mind, there could be more "tops" other than just two, such as a Triple Top/Multiple Top, so that may affect this pattern. Some investors like this pattern because of its short-term trading opportunity and longer-term relative price. As you can see between the first and second tops, there is a slight dip with a recovery. Many investors lik...

Bullish Reversal Patterns are universal patterns that candlesticks can follow that signify a change from a downwards movement to an upwards movement of share price. Identifying these patterns may help when trying to predict if the stock is a good buy. However, it is important to remember that even though a pattern begins to form, it does not always need to finish. There is no guarantee that a pattern will follow through to the end. With that being said, here are some of the most popular Bullish Reversal Patterns: Double Bottom      Above is an example of the Double Bottom pattern. This can be identified by the two identical bottom points the share price reaches. Some investors like this pattern for its relative price, short-term trading, and long-term trading opportunities. Since the share price hits a bottom, it is most likely relatively cheap and likely has a low RSI . This allows for lots of upwards potential and profit in the long run. On the other hand, the Doubl...

   Bearish Patterns  are universal patterns that candlesticks can follow that signify a downwards movement of share price. Identifying these patterns may help when trying to predict which direction a stock price will go. However, it is important to remember that even though a pattern begins to form, it does not always need to finish. There is no guarantee that a pattern will follow through to the end.  With that being said, here are some of the most popular Bearish Patterns: Bearish Engulfing     Above is an example of a Bearish Engulfing pattern. This pattern is identified by a red candlestick that completely encases a green candlestick. As you can see in the example above, the top of the red candlestick is above the top of the green candlestick, and the bottom of the red candlestick is below the bottom of the green candlestick. This is one of the shortest Bearish patterns but it is very important for quickly determining a stock's future direction. Bear ...

  Bullish Patterns  are universal patterns that candlesticks can follow that signify an upwards movement of share price. Identifying these patterns may help when trying to predict which direction a stock price will go. However, it is important to remember that even though a pattern begins to form, it does not always need to finish. There is no guarantee that a pattern will follow through to the end.  With that being said, here are some of the most popular Bullish Patterns: Bullish Engulfing     A Bullish Engulfing  pattern is when a green candle completely encases the previous red candle. In the example above, you can see the green candle is above the top and below the bottom of its previous red candle. This is one of the shortest Bullish patterns out there, but it can be really useful for determining price direction early on. Bull Flag     A Bull Flag is another one of the most common Bullish patterns because of its quick buying and selling oppor...

 The V olume Weighted Adjusted Price (VWAP) gives the average price a stock has traded at throughout a day based on its price and volume. The VWAP is mainly used to determine a stock’s direction and valuation. Some traders like it because it is great for intraday trading as well as adjusting a stock’s price for its volume. How to Read the VWAP     Above is an example of the VWAP.  What is important to note is that in many cases, a VWAP can be used as a line of support or resistance. Many stocks may have a history of using their VWAP as these trend lines and therefore you would want to focus on this instead of drawing trend lines yourself. In the case above, the VWAP is acting first as a line of support. When the candlesticks break below the VWAP, there is a massive drop in share price. After this drop, the VWAP acts as a line of resistance and the share price has a difficult time breaking above it. If the candlesticks did break above the VWAP, you could most likely...

Bollinger Bands are envelopes that are contained between a standard deviation above and below a stock’s SMA. When a trend is strong, it will hug the edge of that direction’s standard deviation. This means if a stock is trending strongly upwards, it will hug the top standard deviation. Even more so, if the stock price moves outside the Bollinger Bands, you can expect a very strong trend in that direction. However, if the price moves directly back into the bands then it negates this trend. Using the width of the bands is very important as well. How to Read the Bollinger Bands      As you can see on the left side, the bands are widening and the uptrending begins to end. In the middle where the bands tighten, the stock price soon after shoots directly upwards and begins a new trend. This trend becomes a strong trend when it starts hugging the top standard deviation on the right. Bollinger Bands are very useful to determine a stock's direction and price strength. How to Confi...

 The Moving Average Convergence Divergence (MACD) is a technical indicator that shows the relationship between two moving averages of a stock’s price. It is calculated by subtracting a slow moving average period from a fast moving average period. There is also a Signal line which is a certain period’s EMA. Many traders use the MACD to tell direction and to determine when to buy. The green and red bars in the MACD help tell you which direction the stock is moving. Many traders buy when the MACD crosses above the signal line and sell when the MACD crosses below the signal line. How to Read the MACD          Above is an example of a MACD.  It includes points where the MACD crosses above the Signal line and indicates a buy, as well as when the MACD crosses below the Signal line and indicates a sell. The MACD is a very powerful indicator that a multitude of traders use. Many investors are big advocates for the MACD because of its utility. Not only does it...