8/10/2023 0 Comments Bull flag vs rising wedge![]() Some investors like to use chart patterns when analyzing markets. We’ll also go over basic setups that make them tradable. We’ll focus on the more common trend continuation patterns-bull flags, pennants, and ascending triangles-and explore what they might be signaling in the markets. There are plenty of patterns technical traders see in the markets. Identifying patterns in the market can be useful, because they can sometimes indicate where and when price may be likely to move. If so, you’ve probably noticed how certain patterns and shapes sometimes seem to appear. If you grew up with a strong penchant for connecting stars and identifying constellations, then you might be naturally “hardwired” for identifying market patterns. There are certain rules to trading these patterns, but remember, even historically consistent patterns have varying failure rates The move was so strong that the bulls never let the correction take on the shape of a normal consolidation pattern that forms pointing down in to the uptrend or a sideways type pattern such as a triangle or rectangle.Learn how to use chart patterns to identify a potential range of market outcomes, but keep in mind, they can never predict specific outcomesįlags and ascending triangles are relatively common patterns, but they take skill to identify Note the three red bullish rising patterns that made up that impulse leg to the double top at 775 area. Note the inverse H&S bottom that formed at the end of 2011 at roughly 450 or so. PCLN is a perfect example of what I've described above. Let’s look at a few charts that shows a very bullish move up that is made of several bullish rising wedges or flags. They 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. In today's Chartology Report I would like to clear up a misconception about rising wedges and flags. ![]()
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