How to Read Reversal Stock Chart Patterns for Beginner Stock Traders

The common reversal stock chart patterns used to trade stock that beginner stock trades should know are explained below.

Reversal Stock Chart Patterns

The commonly used stock reversal chart patterns are:

Double Tops Reversal Chart Pattern

Double tops stock chart pattern is an M shaped two tops or two peaks pattern that forms on the stock price chart during a upward stock trend.

Double tops stock pattern is a bearish stock pattern that forms when stock price reaches a resistance zone.

The stock price will move upward and then dip slightly then turn up and move upward to the top level where it had reached or slightly below this level then move downward again forming what is known as a double tops stock chart pattern.

Double Bottoms Reversal Chart Pattern

Double bottoms stock chart pattern is a W shaped two bottoms or two lows stock pattern that forms on the stock price chart during a downward stock trend.

Double bottoms stock pattern is a bullish stock pattern that forms when stock price reaches a support zone.

The stock price will move downward in then move up slightly then turn downwards & move downward to the bottom level where it had reached or slightly above this level then move up again forming what is known as a double bottom stock chart pattern.

Head and Shoulders Reversal Chart Pattern

Head & Shoulders pattern is a bearish reversal stock pattern that forms after a upwards stock trend.

There's an initial peak which is the first shoulder then a slight dip in the stock price, then a second higher peak which is the head then another stock price dip followed by the last peak in stock price which is the second shoulder.

The lowest points between the two stock price lows forms the neck-line & the reversal stock trading signal from this head and shoulders reversal stock chart pattern is confirmed once stock price moves below this neckline.

Reverse Head & Shoulders Reversal Chart Pattern

Reverse Head and Shoulders pattern is a bullish reversal stock chart pattern that forms after a downward stock trend.

There is an initial dip which is the first inverse shoulder then a slight peak in the stock price, then a second lower dip which is the reverse head then another stock price peak followed by the last stock price dip in stock price which is the second inverse shoulder.

The highest points between the two stock price peaks forms the neck-line and the reversal stock trading signal from this reverse head and shoulders stock chart pattern is confirmed once stock price moves above this neckline.

How to Read Reversal Stock Chart Patterns for Beginner Stock Traders