Continuation patterns form during pauses in established trends and typically resolve in the direction of the prior trend. Bull flags form after a sharp rally (the 'pole'): price then consolidates in a tight, slightly downward-sloping channel (the 'flag') for 2-5 weeks. The flag's slope should be counter-trend — a consolidation that slopes upward is a wedge, not a flag, and has different implications. Breakout from a bull flag on volume expansion confirms trend continuation. Measured moves project the pole's length from the breakout point as the initial price target.

The cup-and-handle, popularized by William O'Neil in his CANSLIM methodology, is a 7-65 week basing pattern. The cup is a rounded bottom (U-shaped, not V-shaped) representing gradual accumulation. The handle forms in the right side of the cup, a shallow pullback of no more than 12-15% within the upper half of the cup's depth. Breakout volume on the handle break should exceed the 50-day average volume by at least 50%. The pivot buy point is defined as 10 cents above the handle's high. Historical research on the cup-and-handle shows it to be among the more reliable continuation patterns in bull markets.

The head-and-shoulders is a topping reversal pattern: three successive highs where the middle (head) is highest and the two shoulders are roughly equal in height. The neckline connects the two reaction lows between the three peaks. A confirmed break below the neckline on volume initiates the reversal signal; the measured move target is the head-to-neckline distance projected below the neckline. Volume should decline on the right shoulder's rally relative to the left shoulder — a sign of waning buying momentum. The pattern fails if price rallies back above the neckline after initially breaking it.

Double tops (and their mirror image, double bottoms) are simpler reversal patterns: two peaks at approximately the same price level separated by a reaction low. The pattern confirms when price closes below the reaction low connecting the two peaks. Like all reversal patterns, volume behavior is critical: the second peak should form on lighter volume than the first, indicating declining buying interest at that price level. Double tops that form after extended rallies are more reliable than those forming early in a move. The measured move target is the distance from the peaks to the valley, projected downward from the neckline break.

Volume is the single most important validator for chart patterns. The general rules: volume should expand on breakouts in the direction of the pattern's expected resolution; volume should contract during the pattern's formation (the 'base-building' phase); declining volume on the final test of a resistance level before breakout is constructive (sellers are exhausted). A breakout on below-average volume is suspect — it may reflect a vacuum of sellers rather than genuine buying demand, and the breakout is at higher risk of failure and reversal.

False breakouts and pattern failures are as instructive as successes. A head-and-shoulders that fails to break the neckline despite multiple tests, then rallies back to new highs, is a powerful bullish signal — the bears have been squeezed and the bulls have demonstrated control. A cup-and-handle that breaks out on low volume and then reverses to re-enter the base is a warning to reduce or exit the position. Tracking pattern failures (and noting that most reversals come quickly after failed breakouts) builds the pattern-recognition experience that distinguishes skilled technical analysts from beginners.