9/10/2023 0 Comments Rising wedge measured moveThey are also like any other consolidation pattern that generally shows up as a halfway pattern. The opposite is true in a downtrend where you can have a series of bearish falling wedges or flags form. When a stock is in a strong move up you can see series of these patterns that from one after another until a top is reached. I have found out through many years of following these bullish or bearish wedges or flags that they tend to show up in fast moving markets. A typical consolidation pattern, like a bullish falling wedge or flag, points down in an uptrend which everybody sees and is accepted as the norm. Instead of pointing down into the uptrend these type of patterns point up into the uptrend. I’ve been following these two types of patterns for many years and find that are just as reliable as any another consolidation or reversal pattern.Ī bullish rising wedge or flag forms in an uptrend. That means anything is possible regardless of what is taught by the so called experts. Keeping an open mind in the stock markets is the first lesson to learn. These type patterns are missed by 95% of chartists because they supposedly don’t exist and if they do exist they can’t be trusted. I’m repeatedly told to go back to charting school to learn my lesson. I have gotten more negative e mails from folks that assure me there is no such thing as a bullish rising wedge or flag. Learn more about wedge patterns like the rising wedge pattern.In today’s Chartology Report I would like to clear up a misconception about rising wedges and flags. Once the upper trend line was broken to the upside, the stock moved higher with ease.įalling wedge patterns are reliable signals we like to trade from, so we point them out to members of our stock pick service whenever they’re found on the charts. This stock formed a falling wedge pattern during its downtrend which led to an upside reversal and a very reliable trading low. When a falling wedge is a reversal pattern, the widest portion of the wedge may be added to the breakout level to determine the upside move which follows. Volume expansion which accompanies a breakout from a falling wedge adds to the reliability of this chart pattern.īreakout Expectation: In the case of a continuation falling wedge, the widest portion of the wedge may be measured and added to the breakout level to determine the upside move which follows. The early portion of the wedge has a wider price range, while the latter stages of a falling wedge are characterized by tighter price action. This may be seen by drawing two trend lines, a steeper trend line connecting minor highs, and a shallow trend line connecting minor lows. The example shown on this page is a falling wedge reversal pattern found at the end of a downtrend.Īppearance: The falling wedge pattern is a contracting trading range with a downward tilt. When found within the context of an uptrend, the falling wedge is similar to a bull pennant and is a continuation pattern. In both cases, falling wedge patterns are generally resolved to the upside.Ĭontext: Found within a downtrend, the falling wedge is often a reversal pattern. Falling wedge patterns can be found in both uptrends and downtrends, but taking notice of the prevailing trend will help you determine whether the falling wedge signals a continuation pattern or a reversal pattern.
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