What is a bearish wedge? A bearish wedge can either be a continuation pattern or a reversal pattern. This depends on which direction the market was going before the pattern happened.
To be considered a valid breakout the stock should have at least 5 bounces off of support and resistance before it actually breaks out. Why does this chart pattern work? In the pattern the security has a short uptrend. As it continues upward the prices squeeze together forming a triangle pattern. A breakout to either the upside or downside is inevitable and that breakout should be an indicator of the stock’s future price movements. Since the stock broke out to the downside it was a bearish signal. trading the pattern Professional traders should wait for it to break its support level. Once it does they may consider doing a short, or another bearish strategy with a stop above its old support. Other Chart Patterns There are a variety of chart patterns that you can look at. These include; Double Bottom - A pattern that usually marks the end to a downtrend triple top - A pattern that can mark the top of an uptrend Bearish Rectangle Pattern - A bearish continuation pattern which normally occurs in a downtrend OtherChart Patterns |
