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Technical Analysis refers to the study of financial markets based on price movements. It uses the assumption that the price of a share reflects all information about that share including market sentiment as well as its perceived value.

Charting refers to technical analysis that is performed through careful inspection of share price data for identification of well known patterns that emerge in share prices; for example, head-and-shoulders, channels, triangles and wedges.

Chart patterns are well documented in technical analysis literature and are based on psychological phenomena that occur between the buyers and sellers of financial instruments in liquid markets.

Pattern formations do not form a trading system, but rather provide an indication of the future trend of a share as the price breaks key psychological barriers in the form of support and resistance lines.