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
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.