Saucer Patterns
Rare Pattern Is One of the Most Predictive
One of the most predicitive
chart patterns you will come across is he saucer pattern. Saucers are also
referred to as "bowls" or even "rounded tops or bottoms",
and one look at this pattern tells where these names are derived from.
However, there is a problem with saucer patterns - they're hard to find.
Saucers represent a slow,
gradual change in trend. The best saucer formations show a clear arc with a
tight trading range at the bottom of the arc. When we spot this formation, we
are looking to trade off the bottom of the saucer to the "lip", or
the level where the saucer began to form.
Some traders like to
trade a saucer after the formation is complete, either going long on a break
up from the lip or short if the lip is honored as resistance. This approach
works well at times, but the safest bet is trading inside the saucer.
Saucers are rare in
todays market. You can spend hours scouring daily charts before coming across
one. However, they are easier to find in real time charts and still hold
their predictive potential. Regardless of the time frame you are looking at,
keep an open for this pattern - it would be difficult for the market to
telegraph a trend reversal any more clearly.
|
Nice Saucer Pattern
on BVSN
Saucers can occur at
tops as well as bottoms, as shown by WCOM
Saucers are easier
to find in real time, as illustated by this 5 minute chart of SGP
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