Nifty Chart Patterns Every Investor Should Know

In the volatile investing market, understanding stock market charts and their patterns is similar to deciphering a code. These visual representations of price movements can provide invaluable insights into the trends and opportunities. Such predictions are useful for investors for profitable trades. This guide will delve into some of the most common and effective chart patterns that every investor should know.

So join us as we elaborate further so that you can gain a competitive edge in the market.

The Various Kinds of Nifty Chart Patterns

Ascending and descending staircases

These are probably the most basic Nifty 50 chart patterns that depict the market's price action, which is rarely linear. In the former, the market is moving upward, while it may regress occasionally. It is characterised by a series of higher highs and higher lows, indicating an uptrend. Alternatively, in the descending one, a series of lower highs and lower lows signals a downtrend.

Symmetrical triangle

This pattern lockers when two trends approach one another. It looks like someone overlaid an ascending triangle into the descending one and erased the horizontal lines. It can signify a few different things depending upon the market conditions.

A symmetrical triangle is formed when price action converges between two converging trend lines. It generally suggests the potential breakdown or break out.

Ascending triangle

This chart pattern is created when a horizontal set of highs meets a similar set of lows. The upper line is the resistance level, whereas the downward slope is the support.

When the former meets the latter, it indicates that buyers are becoming more aggressive, pushing prices higher. In such cases, a bullish breakdown is expected, with the target price being the height of the triangle.

Descending triangle

It is generally opposite to the ascending one and takes place after a downtrend. It is formed when the resistance meets the support level. It indicates that the sellers are gaining momentum, pushing prices lower. When the horizontal set of lows meets the descending set of highs, it suggests a bearish breakdown is likely.

Double bottom

Opposite to the double top, in this nifty chart pattern, the price reaches a low retrace and then reaches the same low again. The second trough is typically higher than the first, indicating a potential reversal to an uptrend. Here, a neckline is drawn between the two highs, and a breakout above confirms the reversal.

Double top

When the market price reaches a couple of highs consecutively with a small decline in between, a double-top pattern can be expected. It looks like the alphabet “M” on a chart. The second peak is typically lower than the first, indicating a potential reversal to a downtrend. A neckline is drawn between the two lows, and a breakdown below this confirms the reversal.

Flag

When the market’s resistance lines and support run parallel to each other, a flag pattern is formed. It either slopes upwards or downwards. The pattern occurs after a sharp move is observed in the direction of the trend. A rectangular consolidation follows, known as the flagpole. The breakout from this usually confirms a continuation of the previous trend.

Wedge

This stock market live chart pattern is similar to a flag but has a triangular shape. It occurs after the sharp move and suggests a continuation of the trend. It might either be rising or falling and depending on the situation, short-term traders choose to make small profits from the oscillations.

Head and shoulders

It is a reversal pattern considering 3 peaks- the left and the right shoulder along with the head. The latter is generally higher than the former. A neckline is drawn between the lows of the shoulder. A breakdown between the same confirms a bearish reversal.

Bottom line

Such technical indicators are essential to understanding asset movements' hows and whys. Navigate the volatile market and download reliable platforms like Research 360, which will provide you with the necessary insights required in trading. Leverage such applications today and gain an edge in the market.