While Charles Dow authored the famous 'Dow theory' and is considered to be
one of the fathers of technical analysis, it was Richard Schabacker who
pioneered the use of popular chart patterns such as head and shoulders,
broadening tops, and many others. There are two main categories of price
patterns that Schabacker discussed: continuation patterns and reversal
patterns. The popular head and shoulders pattern, which often occurs at the
end of both up and down-trends, is a well known reversal pattern. Wedges
can also sometimes act as reversal patterns. Continuation patterns include
rectangles, pennants and flags. The most favorable continuation patterns
are short in terms of time, and represent some of the best trading
opportunities among all chart patterns. Schabacker also analyzed gaps, such
as breakaway and exhaustion gaps, and considered gaps to have important
forecasting value.

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