Education & Information
Sell Signals
Bearish Shakeout Pattern
The bearish shakeout pattern is a form of a triple bottom. The first two columns of Os stop declining at the same level, which is $38 in the chart above. The two columns of Xs on the chart during this pattern actually break a double top. Similar to a bull trap pattern, if there is no follow through to the double top, it indicates the buying or demand is weak. The next three box reversal should be used to sell the stock. The probabilities are high that the next column of Os will follow through and break a triple bottom. In order for this pattern to be effectively used you want to make sure the major trend for the stock is down and the relative strength chart for the stock is on a sell signal.