In most cases, most patterns can happen anywhere. But there are some patterns labelled as bottoming/reversal formation and others labelled as continuation patterns.
Reversal patterns include double bottom, bottom triangle/wedge, rounding bottom, inverse head and shoulders pattern etc… These usually happen near bottom and are not commonly seen near 52 W highs or multi year highs.
Continuation patterns are flags, pennants, cup and handle, etc. These are often seen near 52 W highs and multi year highs. These offer time correction in a stock’s upward journey. Once this time correction is over, upmove resumes.
A common pattern I often see ( not always but quite frequently ) in stocks clearing 52 weeks high/multi year highs is symmetrical triangle. Triangles are very tricky structures, but provide powerful base for a strong breakout. Symmetrical triangle is an example of contraction ( also known as contracting triangle) where prices contract with lower and lower volumes before a breakout happens with huge volumes. I feel its a variant of the VCP desribed by Minervini. I think we have discussed such triangular consolidations in Usha Martin and HBL in this thread. Sometimes there can be more than one triangular pattern on top of each other, or more than one rectangular consolidation on top of each other… This is a variant of base on top of a base described by William O Neil.
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