Technical formations

Technical formations are patterns in the stock price that indicates trend reversals or horizontal trends, consolidation. There is some well-defined formations that have been defined based on historical stock price statistics. By identifying these formations in the share price you can get indications of trend reversals or consolidation.

Technical formations are used in technical analysis to generate buy signals and sell signals. Examples of technical formations are head-shoulder-formation, double-top, rectangle, falling-wedge and triangle formation.