[צ'סלר] בשלביה האחרונים של המגמה ובתחילת היווצרותה של התבנית הטכנית הקלאסית, השוק מאופיין בתנודתיות יחסית גבוהה ושינויי כיוון חדים. לאחר שלב זה התנודתיות הולכת ונחלשת במקביל לפיתוח התבנית הטכנית, עד שמגיע שלב קריטי המסמן את "תחילת הסוף" של פיתוח התבנית. שלב סופי זה, ממש לפני הפריצה, מאופיין בירידה דרסטית בתנודתיות (יחסית לזו ששררה בתחילת פיתוח התבנית). המחיר כמעט ואינו זז ונראה כאילו עומד לפני הצתת פתיל הפריצה. ניתן להשתמש בכלים שונים כדי לאמוד שינויים בתנודתיות. אחד מהם הוא מתנד ה-ADX שפיתח וויילדר. מתנד זה מבוסס על ממוצע שיאים ושפלים בפרק זמן מוגדר (מומלץ לעשות שימוש ב-14 יחידות). ה-ADX יציב יותר בהשוואה לאומדני תנודתיות טהורים (יחידות סטייה למשל). למרות שה-ADX מופיע לרוב בספרות כמודד חוזק מגמתי, אין מניעה להשתמש בו למטרת אומדן תנודתיות. תנודתיות גבוהה תסומן בידי רמות ADX גבוהות (יש להתעלם מה-DI+, DI). תנודתיות נחלשת תסומן ע"י קו ADX יורד. סיום פיתוח התבנית (והצפי לפריצה) יסומן, בדרך-כלל, על-ידי ADX היורד אל מתחת לרמת 20 וסוגר ברמת 10.

The Anatomy Of Tops, Desmond, 2006
An exploration of the nature of bull market tops. Study of 14 peaks shows they don't come out of the blue. Major market tops are not the same as major market bottoms. A 2002 Lowry study titled Identifying Bear Market Bottoms and New Bull Markets showed that major market bottoms can often be identified by evidence of panic selling (one or more 90% Downside Days) in which investors dump stocks with abandon. Then, with the desire to sell having been exhausted, buyers suddenly rush in to snap up the bargains (and cover short positions), resulting in a 90% Upside Day. The combination of panic selling across a broad spectrum of stocks, followed quickly by broad, enthusiastic buying, produces what might be described as a classic “V” pattern of prices at major bear market bottoms. Bull market tops, on the other hand, tend to develop gradually over a long period of time. The reasons for this gradual process are easy to understand: It is the Law of Supply and Demand at work. Just as bull markets result from strong, persistent investor demand for stocks, bull market tops evolve when investors gradually stop buying. Some investors simply run out of new money to invest. Others begin to see individual stocks as being overvalued, and begin to hold back on new purchases. Whatever the reasons, the stock market cannot continue to advance without Demand exceeding Supply. The evolution of investor psychology from strong buying enthusiasm for stocks to passivity or complacency does not occur suddenly. Thus, bull market tops are commonly diffuse, possibly lulling most investors into inaction. There are several helpful tools that technical analysts have used for many decades to warn of impending stock market tops, such as the Advance-Decline Line and the number of stocks recording New 52-week Highs. History shows that these indicators often top out and begin to contract, as individual stocks fall by the wayside, months in advance of the final top in the Dow Jones Industrial Average. Therefore, it would not be a surprise to find that all stocks do not reach their peaks simultaneously or in unison with the DJIA. But, it is the degree and the intensity of the divergences of individual stocks from the DJIA that had never been measured before - until now.

[Edwards and Magee] Classical technical criteria required for a "head-and-shoulders" bottom:
A: A decline, climaxing a more or less extensive downtrend, on which trading volume increases notably, followed by a minor recovery on which volume runs less than it did during the days of final decline and at the bottom. This is the "left shoulder".
B: Another decline which carries prices below the bottom of the left shoulder, on which activity shows some increase (compared with the preceding recovery) but usually does not equal the rate attained on the left shoulder decline, followed by another recovery which carries above the bottom level of the left shoulder and on which activity may pick up, at any rate exceed that on the recovery from the left shoulder. This is the "head".
C: A third decline on decidedly less volume than accompanied the making of either left shoulder or head, which fails to reach the low level of the head before another rally starts. This is the "right shoulder".
D: Finally, an advance on which activity increases notably, which pushes up through the neckline and closes above it by an amount approximately equivalent to 3% of the stock's market price, with a conspicuous burst of activity attending this penetration. This is the "confirmation" or "breakout".

Head and Shoulder: Not Just a Flaky Pattern, Osler and Chang, 1995
"This paper evaluates rigorously the predictive power of the head-and-shoulders pattern. Though such visual, nonlinear chart patterns are applied frequently by technical analysts, our paper is one of the first to evaluate the predictive power of such patterns".

Are Technical Trading Rules Profitable? Evidence for Head-and-Shoulder Rules, Lucke
"This paper focuses on the prominent head-and-shoulder pattern as a representative trading rule which incorporates various "technical" ideas such as smoothed trends, trend reversal, resistance levels, and volatility clustering. For various combinations of the building blocks of head-and-shoulder definitions the result is generally negative: Returns to head-and-shoulder trading rules are not significantly positive".

[Shaw] Primarily continuation patterns, the three types of triangles that are most often found are the symmetrical, the ascending and the descending. Two of the triangle patterns have some predictive value: namely, the ascending and the descending. These two configurations reveal a positive force of market action versus a neutral force. The ascending triangle, for example, illustrates a positive force of buying (higher lows) versus the neutral force of selling (the flat top). In most cases, the positive force will eventually win out, indicating that the ascending triangle is a consolidation phase most often found in an uptrend. Conversely, the descending triangle has the same qualifications: an aggressive force of selling (the descending highs) against a neutral force of buying (the flat bottoms). The descending version is, therefore, most often found within a major downtrend. The symmetrical triangle, as illustrated, is made up of two positive forces - the buying side (the ascending bottoms) and the selling side (the descending tops). Although such a triangle is often completed with a move in the direction from which the stock came, there have been many times when a symmetrical triangle has also been a reversal pattern. By using trendlines and following closely a stock's movement within the neutral trend, a hint is often given as to the possible direction of the impending move. Volume trends and relative strength analysis can often be additional aids toward determining the eventual direction of the breakout.

[Shaw] Aside from the triangles, there are number of other technical configurations that qualify as consolidation patterns. In particular, there is a pattern called the Wedge and then there are two short-term configurations that go by the names of Flag and Pennant. The Wedge, as a consolidation configuration is somewhat similar to the triangular variety except that the trendlines move in the same direction. the Falling Wedge usually occurs in a major uptrend pattern. The slope of the trendlines indicates that the sellers may be aggressive but the buyers are relatively less timid. This is indicated by the fact that the slope of the underlying trendline is not as great as the slope of the overhead downtrend line. In addition, as this short-term phase of profit-taking occurs, volume usually shows a marked decrease. The Flag and Pennant formations are very short term in nature and indicative of a spritely market for the stock under observation. This patterns will most often occur early in an upward or downward trend. Most often, it is an illustration of short-term consolidation before a resumption of the underlying trend.

Three Peaks and the Domed House - Revisited, Leib, 2000
In 1968, George Lindsay, a master technical analyst, published an article in which he outlined a repetitive chart pattern that he had specifically found at the end of long sustained bull markets. He called his pattern "Three Peaks and a Domed House", and used it to predict a peak in the DJIA for October 31, 1968 or a little later. Lindsay spotted this idealized formation on several different occasions in the chart of the DJIA between 1906 and the early 1960's, some with small variations to the idealized pattern, but none with more significance than the point 23 high made on September 3, 1929.