Inverse Saucer
Categories: Charts
First imagine a saucer. Not like a flying saucer, but an actual saucer...like, the kind of thing a cat would lap milk out of. Okay, now picture it from the side and turn that image into a 2-D rendering. Basically, you're looking at a flat rim, with a rounded bowl underneath.
All right...flip that image over. Now it's a a rounded top, almost like a little hill. That's the basic shape of an inverse saucer, a technical trading pattern which suggests that a stock has reached its high, and upward momentum is petering out.
Technical trading looks at the patterns a stock forms during trading. Then it uses those patterns to make predictions about future activity. In an inverse saucer, the stock has been rising, but then starts to flatten out. Eventually it begins drifting back down. So it rises, slows its advance, then moves sideways for a bit before drifting back lower. The shape formed resembles the image of an upside-down (or inverse, if you will) saucer.
The shape suggests that the stock has stopped rising for the time being.