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One chart pattern to watch for is the "parabolic". This is a reference to what what is also called an accelerated growth phase. After a stock breaks out from a long basing pattern, it will sometimes enter a rapid growth phase with a series of ever-steepening, rising trend lines. Often the acceleration of price appears as a parabolic curve on the price chart, and sometimes the final stages of the move will climax with a leg that is virtually straight up.

Parabolics almost always collapse. Sometimes there is a bit of topping followed by a controlled, but precipitous decline, but other times the straight up move reverses into a straight down move of equal or greater magnitude.

The chart below is a good example of a parabolic rise followed by a collapse.

Once the parabolic has broken down, prices will sometimes return to the level where the parabolic rise began. This is most common with bubble stocks that were bid up on hype rather than substance. The best example of this is the many Internet stocks that rose to glory, then disappeared from view forever.

Another possible outcome is that the stock loses a substantial amount of its gain, then enters a high-level consolidation. This is what appears to be happening with GE in the chart above.