P&G- How Micro Patterns Create Long Term Trends: PG
In this illustration, we observe how various micro patterns can translate into a longer-term macro pattern. With the case of PG, for prevailing micro patterns have progressed in what appears to be a bullish rising channel which has recently broken through. As the longer-term trend unfolds, the micro patterns will form in series of periods of high volatility and low volatility. Each pattern gives us an idea into the minds of the collective market consensus. Let’s examine what each pattern tells us in terms of an observational standpoint.
ABCD:
the ABCD pattern is commonly referred to as a reversal pattern. This is because the ABCD typically occurs at key turning points within a stock’s prevailing trend. The ABCD represents between B&C that light selling activity has commenced. The overall formation depicts a weakening of bullish accumulation and that although prices continue to raise exhaustion of buyers will likely proceed.
Rising channel:
The rising channel pattern is a highly reliable pattern that is typically considered one of the safer longer-term patterns to examine. The rising channel is characterized by a series of price changes which occur at intervals in between symmetric areas of support and resistance where the price respects these areas and makes sharp or distinct changes in between the zones. The rising channel displays that traders have a clearly defined consensus of the future value of the security, and that reasonable amounts of selling and buying activity is occurring meaning there is interest and activity and therefore opportunity.
Pennant:
The pennant pattern can occur in numerous phases. Typically, the phases are characterized by the ascending or descending slope of the support or resistance lines. The pennant pattern commonly occurs at consolidation zones or within the boundaries of macro patterns. Tenants represent an overall tightening and narrowing of volatility and can be used to pinpoint key turning points either bullish or bearish regarding the stocks long-term trend.
Symmetric Broadening Wedge:
the symmetric broadening wedge at any point in the stocks long-term trend represents an expansion of volatility. In the case of the symmetric broadening wedge, the battle between the Bulls and Bears is considered more volatile than in the case of a standard broadening wedge. Indicated by the slope of the support and resistance lines, a standard broadening wedge will likely display a flat support or resistance line and a slanted support or resistance line a symmetric broadening wedge displays two sloped lines and therefore demonstrates a maximum expansion of volatility.
By examining the chart of PG, it is much easier to determine that micro patterns do in fact subsequently lead to longer-term macro patterns. PNG appears to be bullish dominated and experiencing increased accumulation over time. Although 2018 was more turbulent than two years prior, 2019 yielded favorable results for the security along with other existing industry leaders.
ABCD:
the ABCD pattern is commonly referred to as a reversal pattern. This is because the ABCD typically occurs at key turning points within a stock’s prevailing trend. The ABCD represents between B&C that light selling activity has commenced. The overall formation depicts a weakening of bullish accumulation and that although prices continue to raise exhaustion of buyers will likely proceed.
Rising channel:
The rising channel pattern is a highly reliable pattern that is typically considered one of the safer longer-term patterns to examine. The rising channel is characterized by a series of price changes which occur at intervals in between symmetric areas of support and resistance where the price respects these areas and makes sharp or distinct changes in between the zones. The rising channel displays that traders have a clearly defined consensus of the future value of the security, and that reasonable amounts of selling and buying activity is occurring meaning there is interest and activity and therefore opportunity.
Pennant:
The pennant pattern can occur in numerous phases. Typically, the phases are characterized by the ascending or descending slope of the support or resistance lines. The pennant pattern commonly occurs at consolidation zones or within the boundaries of macro patterns. Tenants represent an overall tightening and narrowing of volatility and can be used to pinpoint key turning points either bullish or bearish regarding the stocks long-term trend.
Symmetric Broadening Wedge:
the symmetric broadening wedge at any point in the stocks long-term trend represents an expansion of volatility. In the case of the symmetric broadening wedge, the battle between the Bulls and Bears is considered more volatile than in the case of a standard broadening wedge. Indicated by the slope of the support and resistance lines, a standard broadening wedge will likely display a flat support or resistance line and a slanted support or resistance line a symmetric broadening wedge displays two sloped lines and therefore demonstrates a maximum expansion of volatility.
By examining the chart of PG, it is much easier to determine that micro patterns do in fact subsequently lead to longer-term macro patterns. PNG appears to be bullish dominated and experiencing increased accumulation over time. Although 2018 was more turbulent than two years prior, 2019 yielded favorable results for the security along with other existing industry leaders.