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A chartist is an investor who attempts to predict market movements through the use of chart patterns. A chartist believes that by studying past market actions, as graphically displayed on a stock market chart, that the future course of the market can be revealed. In this respect a chartist relies on technical rather than fundamental market analysis. There are several chart patterns which a chartist looks for when making predictions of future market moves. A primary pattern that a chartist looks for is the classic head and shoulders pattern, with market highs making a small rally (creating a shoulder), followed by a higher rally (creating a head) and then back down and sideways (forming the other shoulder). To a chartist this is a bearish pattern. A chartist uses this and other chart patterns to plan investments. |