What is a 'Mat Hold Pattern'

A mat hold pattern is a pattern found in the technical analysis of stocks that ultimately indicates the stock will continue its previous directional trend, meaning bullish or bearish.

This type of pattern is initially indicated by a significant trading day in one direction or another, followed by three small opposite trending days. The fifth day then continues the first day's trend, pushing higher or lower, in the same direction as the first day's movement.

BREAKING DOWN 'Mat Hold Pattern'

A mat hold pattern is considered a very reliable but rare indicator in the technical analysis of stocks. It is often confused with the rising three's indicator, with the difference being that the trades on days two to four of the rising three indicator generally stay within the high and low established on the first day.

The rising three methods, also known as a rising three methods pattern or just a rising three pattern, is a bullish candlestick pattern. Investors and analysts use this pattern to try and predict whether the current uptrend will continue, and to what degree. Analysts and traders generally assume this chart pattern indicates this momentum will hold steady and the upward trend will continue.  

With a mat hold pattern, on the other hand, the trading range of days two to four in the pattern can trade outside of the high-low range made on the first day.

Mat Hold Pattern and Technical Analysis

A mat hold pattern is one type of pattern that can be identified through the technical analysis of stocks. There are two different approaches to evaluating and studying financial markets: technical analysis and fundamental analysis. They can each tell you important things, but each focus on specific findings and use different tactics and methods to draw conclusions and make predictions.

Technical analysis is the study of trends and historical market data. Technical analysts will look at the price movement of a particular security and use this data to try and make predictions about future activities and performance. Technical analysts will generally refer to charts and graphs as a starting point.

Fundamental analysis, on the other hand, involves studying financial and economic factors that have an impact on a business. Fundamental analysts begin by reviewing a company’s financial statements and other economic records such as a balance sheet and cash flow statements. Technical analysts believe that these reviews are just unnecessary work, since the technical approach is based on the idea that the stock activity and history will tell you everything you need to know to determine where the price might be headed.

RELATED TERMS
  1. Pattern

    A pattern, in finance terms, is a distinctive formation on a ...
  2. Technical Analysis of Stocks and ...

    Technical analysis of stocks and trends is the study of historical ...
  3. Double Bottom

    A double bottom pattern is a technical analysis charting pattern ...
  4. Technical Analysis

    Technical analysis is a trading discipline employed to evaluate ...
  5. Rising Bottom

    Rising bottom is a pattern on a security's chart, considered ...
  6. Morning Star

    A morning star is a bullish candlestick pattern in a stock's ...
Related Articles
  1. Trading

    Technical Analysis: Triple Tops and Bottoms

    Triple and double tops and bottoms may be tough to spot but can be powerful patterns.
  2. Trading

    Intro to Types of Trading: Technical Traders

    Explore in detail the technical trading approach, which looks to the past to predict the future.
  3. Trading

    Advanced Candlestick Patterns

    Learn how to identify and trade the island reversal, kicker, hook reversal and three gap advanced candlestick patterns.
  4. Investing

    Fundamentals And Technicals: Together At Last

    It's a big mistake for a fundamental investor to ignore technical analysis. Find out how to become chart smart.
  5. Trading

    Exploring Oscillators and Indicators

    Find out how to use these technical analysis building blocks.
  6. Trading

    Most Commonly Used Forex Chart Patterns

    Greatly improve your forex trading by learning these commonly used forex chart patterns that provide entries, stops and profit targets.
RELATED FAQS
  1. What are the differences between a bar chart and candle sticks?

    Explore the difference between bar and candlestick charts. Learn how technical analysts use charts in the analysis of supply ... Read Answer >>
  2. What is the difference between fundamental and technical analysis?

    Fundamental analysis and technical analysis, the major schools of thought when it comes to approaching the markets, are at ... Read Answer >>
  3. Is Technical Analysis a Self-Fulfilling Prophecy?

    Technical analysis seems to be useful, but some say it is simply reinforcing what investors believe. Read Answer >>
Trading Center