So a few questions for those who trade classic chart patterns.
When do you consider a pattern to have failed? For instance, on the Sun Pharma Weekly Chart, a Double Bottom breakout occurred around 610. So when the stock fell back down again, is the movement below the Double Bottom Peak at 610 the failure? Or is it the move below the Twin Double Bottom Valleys at around 436, that should be considered the actual failure?
If a breakout/breakdown on a chart is caused by news, is it considered a valid breakout/breakdown? Often, news based trading activity makes for a very strong bar. So if such a bar is the one that completes a pattern, is it considered a valid completion? In other words, should you at all bother about what has caused the breakout, & simply take the chart at face value?
Thanks for your time. Cheers.