These patterns take an extra day to form, but they spot turning points more accurately than standard reversal-day definitions.If you glance at any price chart, you’ll notice that market tops and bottoms seem easy to spot in hindsight. But trends reverse for countless reasons, so it is virtually impossible to identify these turning points as they are developing. Here, we re-examine reversal patterns and search for scenarios that lead to short-term weakness or strength, using the S&P 500 tracking stock (SPY). Read on to learn more.
The parabolic SAR is a technical analysis indicator that sets trailing price stops for long or short positions and may assist investors with selecting entry and exit points. Learn more about this indicator and how to add it to charts on Fidelity's trading platforms.
Find out how the pattern has performed in the past and how to find good trade candidates in the future.
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