Ascending wedge

Ascending wedge is a bear model that begins with the formation of a broad base and narrows as the upward movement in prices when trading range is compressed. In contrast to the symmetrical triangle, which does not have any particular inclination, neither bovine nor Bear gradient rising wedge is definitely tilted up and have a bearish bias. Although this article focuses on the ascending wedge as turning on the model, it can also be included in the category of continuation patterns. As a model to continue, rising wedge will still tilt up, but the slope will be against the prevailing downward trend. As a model of turning, ascending wedge tilted upward in the direction of the prevailing trend. Regardless of the nature (or the continuation of a turn), rising wedge is considered as a model for bear.

1. Prior Trend: To qualify as a model of formation of turn, must be prior to the trend to turn. Usually, the bottom gusset is formed over a period of 3-6 months (for long-term scale), and can observe the medium-and long-term trend turns. Sometimes, the current trend is fully in ascending wedge, in other cases, the model is formed after a prolonged increase.
2. The top line of resistance: it is required at least two maximum reaction to form the upper resistance line, although ideally it would be three. Each reaction maximum should be higher than previous peaks.
3. The bottom line of support: requires at least two minimum reaction to form the bottom line of support. Each reaction must be at least higher than the previous minimum.
4. Convergence: The upper resistance line and lower support line converge as the model. Promotions from the reaction minimum (bottom line of support) are becoming shorter and shorter, making the rally unconvincing. This creates a top line of resistance, which can not maintain the same slope as the bottom line of support and show that the proposed increases to the extent of price increases.
5. Breakthrough Resistance: bearish character models are not confirmed until the line of support will not be convincingly broken. Sometimes prudent to await the break below the previous minimum of reaction. Once the support broken, sometimes it can be reactionary rally to test the newly created level of resistance.
6. Volume: ideally, if the amount will decline as the rising prices and a wedge. Increased support in the break lines can be bear proof.

Ascending wedge can be one of the most difficult graphic models to accurately recognize and related trade. At the same time as formation of consolidation, the loss of a rising momentum, with each enhancing the model gives its bearish bias. However, a series of higher highs and higher minimum support directly bullish trend. The final breakthrough of support indicates that the sellers finally won the battle and are likely to push down prices. In this model there is no technology for the design of a subsequent decline, so you need to use other aspects of technical analysis for purposes of measuring price.

Schedule "ANN" represents an excellent example of turning a rising wedge model, which was formed as a result of weakening of the momentum and cash flow.

• The previous trend is: starting from a minimum at around 10 in October 1998. ANN increased to 23 in less than 7 months. Last ascending branch is formed with a sharp increase from a level below 15 in February to 23.5 in mid-April.
• The top line of resistance: The upper resistance line was formed by three consecutive higher maximums.
• The bottom line of support: the bottom line of support was formed by three consecutive higher minimums.
• convergence: The upper resistance line and lower support line converge as the model. Visual assessment confirms that the slope of the bottom support line steeper than the upper line of resistance. The lower slope of the upper line of resistance indicates that the momentum fading, as the price makes new records.
• Breaking through the resistance: the price crept through the support of more than a week before the final break with a sharp decline. The previous reaction was overcome at least a few days later, a long black candle (red arrow).
• Volume: Chaikin money flow back into the negative zone in late April and was well below -10%, when the support line was broken. It has also been increased when he was breaking the previous reaction minimum.
• Support from the April level in the reaction area 20 has turned into resistance, and the price tested that level in early July, before declining further.

Forex Magazine
based on www.stockcharts.com

The double peak (a model of turn)

The double peak is a major turning model, which is formed after a long ascending trend. As its name implies, the model consists of two consecutive peaks that are approximately equal to each other with a moderate depression among them.

Although there may be various options, the classic double peak observed at least medium, if not long-term change of trend from bearish to the bovine. Many potential double peaks may be formed as the ascending trend, but still a key support is not broken, do not turn may be regarded as proven. For a better explanation of the model, let us look at the key moments in the formation and then explain an example.

1. Previous trend: As in any turning the model must be an existing trend to turn. In the case of double peaks, must be present a significant upward trend.

2. First Peak: The first peak should be noted the maximum point of the current trend. It is noteworthy that the first peak is quite normal and upward trend in this period shall in no case is at issue.

3. Depression: After the first reduction peaks occur, which usually ranges from 10% to 20%. Volume on the decline from the first peaks are usually insignificant. Reduction sometimes rounded or slightly extended, which may be a sign of sluggish demand.

4. Second Peak: Increase of depression usually occurs with low volume and encounters resistance from the previous maximum. Resistance from the previous maximum is quite expected. Even after the emergence of resistance, there is only the possibility of forming a double top. The model must still be confirmed. The period between the peaks can vary from several weeks to many months (for a large-scale) with a norm of 1-3 months. While preferred the same vertex, may be some differences. Typically, peak at around 3% from the previous maximum schitaetsya it is permissible.

5. The decline from the top: The subsequent decline from the second vertex must occur to increase the volume and / or accelerated decline, perhaps even with one or two GEPami. This decline indicates that the strength of a weaker demand than supply and testing support is inevitable.

6. Breakthrough of support: Even after the decline down to support a double apex turn, and the trend has not yet been formed. Breakthrough support for the lowest point between peaks completes the formation of double peaks. This should also happen with the increase in volume and / or accelerated decline.

7. Support becomes resistance: broken support becomes potential resistance, and sometimes happens that the new test of resistance at the reactionary rally. Such testing could offer a second chance to enter the market in the short side.

8. Price target: The distance from the point of break of support to the maximum may be deferred to bottom of support for pricing purposes. This means that the larger the formation, the greater the potential decline. While the model of "double peak" may seem simple, traders must comply with the appropriate steps to avoid misleading the double peaks. The tops should be separated at a sufficient distance. If the peaks are located too close to each other, they may just represent the normal resistance and no change in long-term picture of supply / demand. Make sure that the minimum between peaks fell at least 10%. The decline of less than 10% can not measure a significant increase in pressure sellers. After the reduction, Analyze depression to obtain information about the strength of demand. If the depression was brief and has problems with increasing back, the demand could dry up. When the price rises, watch the decline in the next sign of easing as demand.

Perhaps the most important aspect of the double peaks is to avoid premature entry into the market before receiving the signal. Wait until the support is broken convincingly, and typically with a volume. Can be applied filter price or time, to distinguish true from false break of support. Price filter may require a 3% first breakthrough support for confirmation of reliability. The filter may require time to break the support lasted for 3 days before it will be considered valid. The trend is in the Twin Peak (model spread) are not valid until proven otherwise. This also applies to double top. While support is not breached convincingly, the trend is ascending. Formation of double peaks for the shares of "Ford" took about 5 months. Even after a break of support, it was another test the new resistance to almost 4 months later.

1. From a minimum at around 10 in March 1997. price had risen to 36 by December 1998. Trend line, stretching up to March 1997. is an internal trend line, and the price kept above her to a breakthrough in May 1999.
2. From the top of the first price fell by about 15% to form a depression.
3. After reaching a minimum at 30 1 / 2 in early February, the depression formed over the next 2 months before the rally in early April. This long, elongated hollow point to the relatively slack demand.
4. Rally of 30 1 / 2 to 36.80 occurred at a fairly good amount, but cash flow is barely surpassed 10%. Maximum of 36.80 was estimated at 2% above the previous peak, but within 3% of threshold. The distance between two peaks was approximately 3 months.
5. The decline of 36.80 was GEPami with two down and an increase in volume. In addition, the Chaikin Money flow quickly moved below -10%. The speed with which decreased cash flow, indicated a serious increase in the pressure of sales.
6. In late May and early June, the market has traded for about 3 weeks from the previous support level. At this time, cash flow has fallen below -20%. Even though the situation looked quite a predefined model double peak would not be complete until support was broken.

7. The support was broken in early June, when the price fell below the 28 1 / 2, which was more than 3% below the support at 30 1 / 2. After this sharp decrease was the same sharp rise back above the new level of resistance. While testing the broken support completely expected, it usually does not occur so quickly. Increasing to 32 to mark the end of June may have caused some trouble with the holders of short positions, which jumped into the market at the first break of support. The price dropped to a mark 25 and then start increasing the recovery, which ultimately will test support.

The second graph, the level of 30 3 / 4 of the support become resistance level and the level of 31 noted a 50% reduction in recovery come from 36.80 to 25. Combining the price action in early June and early July, the zone of resistance, might be established between levels 31 and 32. Price subsequently formed a lower high at 30 in January 2000. and decreased to about 22 by mid-March.

Forex Magazine
based on www.stockcharts.com