Chart Patterns
Chapters in this video
- 0:00 Reversal patterns vs continuation patterns: two families to separate
- 1:07 Head and shoulders: the most tested bearish reversal
- 2:50 Why neckline break with volume is the real confirmation trigger
- 3:58 Saucers and inverted saucers: the gradual U-shaped reversals
- 4:36 Continuation patterns: consolidation, flags, and pennants
- 5:38 Stabilization: legal price support during new issue distribution
- 7:33 Rapid-fire exam recap
What this video covers
- Why head and shoulders is bearish at a market top, inverted head and shoulders is bullish at a market bottom, and how the neckline break with increased volume confirms the pattern
- Why simply seeing three peaks or troughs does NOT complete a reversal pattern without the neckline break and volume confirmation
- How saucers (rounding bottoms) signal gradual bullish accumulation while inverted saucers (rounding tops) signal gradual bearish distribution
- Why consolidation, flags, and pennants are continuation patterns that signal the prior trend will resume, not reverse
- The exam trap that a flat consolidation range means momentum is dead, and why that logic fails on test day
- What stabilization is: legal price support by a managing underwriter during a new issue distribution to prevent the price from falling below the offering price
- Why the stabilizing bid must be at or below the public offering price, and what makes this form of price manipulation uniquely legal under SEC rules
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