AAPL fell from a bearish rising wedge at earnings. Seems like stocks in a rising wedge often are hit at earnings and it doesn't seem to matter whether they hit or miss. .
MSFT has actually broken up just a bit from it's rising wedge and has not broken bottom trendline. The pattern is not valid unless the bottom trendline is broken, but MSFT does appear to be struggling a bit up there. I have seen stocks like COST and CRM break way up from a rising wedge. Later on CRM had a deep pull back and did break the bottom trendline. COST still has not broken it. I am curious to see what will happen with COST as I stayed in even after the break up and sold yesterday, I do not like rising wedges too much )o: I follow EW and it is in a rising, narrowing rising wedge and earnings are tomorrow...so waiting.
As a continuation pattern, the rising wedge will still slope up, but the slope will be against the prevailing downtrend. As a reversal pattern, the rising wedge will slope up and with the prevailing trend. Regardless of the type (reversal or continuation), rising wedges are bearish.
The upper resistance line and lower support line converge as the pattern matures. The advances from the reaction lows (lower support line) become shorter and shorter, which makes the rallies unconvincing. This creates an upper resistance line that fails to keep pace with the slope of the lower support line and indicates a supply overhang as prices increase.
Bearish confirmation of the pattern does not come until the support line is broken in a convincing fashion. It is sometimes prudent to wait for a break of the previous reaction low. Once support is broken, there can sometimes be a reaction rally to test the newfound resistance level. Ideally, volume will decline as prices rise and the wedge evolves. An expansion of volume on the support line break can be taken as bearish confirmation.
As a rule a strong stocks finds support at a level inside the wedge. AAPL was trading in an abc bullish pattern and also broke up from a symmetrical triangle (green lines)
Fantastic earnings!!!
No recommendation
MSFT has actually broken up just a bit from it's rising wedge and has not broken bottom trendline. The pattern is not valid unless the bottom trendline is broken, but MSFT does appear to be struggling a bit up there. I have seen stocks like COST and CRM break way up from a rising wedge. Later on CRM had a deep pull back and did break the bottom trendline. COST still has not broken it. I am curious to see what will happen with COST as I stayed in even after the break up and sold yesterday, I do not like rising wedges too much )o: I follow EW and it is in a rising, narrowing rising wedge and earnings are tomorrow...so waiting.
As a continuation pattern, the rising wedge will still slope up, but the slope will be against the prevailing downtrend. As a reversal pattern, the rising wedge will slope up and with the prevailing trend. Regardless of the type (reversal or continuation), rising wedges are bearish.
The upper resistance line and lower support line converge as the pattern matures. The advances from the reaction lows (lower support line) become shorter and shorter, which makes the rallies unconvincing. This creates an upper resistance line that fails to keep pace with the slope of the lower support line and indicates a supply overhang as prices increase.
Bearish confirmation of the pattern does not come until the support line is broken in a convincing fashion. It is sometimes prudent to wait for a break of the previous reaction low. Once support is broken, there can sometimes be a reaction rally to test the newfound resistance level. Ideally, volume will decline as prices rise and the wedge evolves. An expansion of volume on the support line break can be taken as bearish confirmation.
As a rule a strong stocks finds support at a level inside the wedge. AAPL was trading in an abc bullish pattern and also broke up from a symmetrical triangle (green lines)
Fantastic earnings!!!
No recommendation
Comment:
Gapping down on a Doji is a good thing (o: