3/17/2024 0 Comments Ascending wedge 翻译![]() ![]() ![]() The traders can look for a potential long trade above the upper trendline, i.e., $51. It can be seen that the price bounced back and crossed its upper resistance after having taken support at the lower trendline. The downtrend preceded the formation of Ascending Broadening Wedge Pattern in the chart. Traders can also use the pattern to trade the upside breakout.Īgain, the potential target can be approx the price range of the pattern.įor example, the chart below is of Exxon Mobil Corporation (XOM) on a daily timeframe. The upside breakout possibility is relatively lesser than the downside breakdown. Though the breakout happens on the downside most of the time, the upside breakout of the price from Ascending Broadening Wedge Pattern can’t be neglected. Shorting at the resistance line provides a more significant profit potential. ![]() Most aggressive traders even prefer shorting at the resistance line at around $55 by placing a stop-loss above the previous high. Thus, it can be seen that the price has continued a downtrend after breaking the trendline support. The stop-loss can be placed just above the support line. Traders can look for a short opportunity after the price retest the previous support trend line at around $47 for a minimum target of $40-41. The price broke the lower trend line support with a gap down on July 8 th’2021, only to retest it and continue falling further. Hence, a breakdown of the price below the lower trend line provides a perfect opportunity to short. Usually, the probability of downside exit of the price from the range is higher than the upside. The traders often trade within the range and even the breakouts from the trendlines. The Ascending Broadening Wedge provides numerous trading opportunities for traders. Trading the Ascending Broadening Wedge Pattern ![]() It continues with the price oscillating between the upper and lower trendlines as it continues making higher highs and higher lows. The formation of the pattern starts on June’21. (NIO) reveals the formation of Ascending Broadening Wedge on a daily timeframe in July’21. The price oscillates between the two trendlines. The higher highs and higher lows representing the peaks and troughs are joined to form upper and lower trend lines. The price movement continues with the formation of higher highs and higher lows within a range. The break of the lower support line usually results in a fast and rapid fall, with the sellers entering into fresh short positions.įree Covered Call Course How To Identify The Ascending Broadening Wedge PatternĪn Ascending Broadening Wedge is formed with the price rising after making a low. It does not mean exhaustion on the part of the buyers rather, it indicates the sellers trying to gain control.įor such a pattern to form, the price must touch each trend line at least three times. The price volatility indicates the tug of war between the buyers and sellers, eventually trying to overpower each other. The upper trendline seems steeper than the lower trendline, and the two lines diverge as the price volatility increases. The pattern is formed with price making higher highs and higher lows, and the price tends to fluctuate between the upper and lower trendlines. In addition, the pattern usually signals increased market volatility due to the buyers trying to maintain their control and the sellers trying to gain it. It is mainly because the formation of such a pattern in an uptrend usually signals a reversal of a trend.
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