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Using Charts To Round Out Stock Selection, Part II

The key to reading stock charts is knowing what to look for. This lesson explains how to evaluate charts and the characteristics that distinguish the winners.

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The Most Successful Chart Patterns

Research shows the greatest stock market winners formed one of five basing chart patterns at the beginning of their major price advances or shortly thereafter.

Cup with handle
Saucer with handle
Double bottom
Flat base
Ascending base

Studies show most of these basing patterns should form over at least seven or eight weeks; however, the flat base can be as short as five weeks. Typically, the longer the basing period, the stronger the potential price increase. Many bases are up to fifteen months or longer.

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Updated! — Stock Market Outlook Executive Summary By Fisher Investments
June wiped out what had been a great start to the second quarter. In our view, this was the third leg down in a triple-bottom correction — unusual, but not unprecedented. Full Story

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