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Pattern recognition using EOD quotes



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I've got a student who'll be doing an undergraduate senior thesis this 
spring and have been passing on ideas for thesis topics.  One that crossed 
my mind recently is applying basic pattern recognition concepts to 
end-of-day quotes (open-hi-lo-end-volume) to find chart patterns such as 
trend lines, head & shoulders, double/triple tops and bottoms, etc.  Would 
anyone know whether the algorithms used in some charting software to find 
some of these basic patterns were developed by trial-and-error methods or 
whether there are known theories  or concepts used to devise algorithms?  I 
would prefer that the work be based on some known principles of pattern 
recognition rather than based on intuition.  Of course, if there isn't any 
applicable theory to use as a foundation, perhaps the student can try to 
develop some basic principles.

Thanks for any input.


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Pierre A. von Kaenel
Assoc. Prof., Math & Computer Science Dept.
Skidmore College
Saratoga Springs, NY 12866

pierre@xxxxxxxxxxxxx

"Simplify, simplify, simplify" - Thoreau
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