chart formation

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Chart Formation

The graphical representation on a chart of a trend in security prices. Technical analysts identify chart formations for a security and predict future price movements in part by matching current patterns with previous patterns.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

chart formation

A series of graphed stock prices or other market variables that form a recognizable pattern that may be used to determine future movements of the charted variable. Chart formations are not always as clearly defined as their users would like; thus, the ability to recognize and use charted data varies among technicians. Also called formation, pattern. See also inverted formation.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
Double tops and double bottoms are considered to be among the most powerful chart formations indicating a reversal in the in the direction of an overall trend.
It was also attended by traders honing their technical analysis skills at the technical master class, covering topics such as charting and candlestick chart formations used to analyse trends and enhance investment decisions.
S&P technical analysts write that "advisor and investor bullishness is too pervasive and is focused on too few stocks." In fact, sentiment indicators, chart formations and market internals--measurements of stock price advances and declines--have made "the market, particularly the Nasdaq leaders, vulnerable," As a result, analysts recommend that investors do not stand by tech stocks alone.