One of the three hypotheses of stock technical analysis is that the history of the stock market will repeat itself. This hypothesis holds that there is a certain relationship between market behavior and people's psychology. Price patterns express people's optimism or pessimism about a market through specific charts, so the market will repeat the changes of human behavior.

Technical analysis is based on three assumptions, and only when these three assumptions are established can technical analysis be established. The other two hypotheses are that market behavior contains and digests all the factors that affect prices, and the market operation mode evolves in a trend way.