*QLOGIC example"Vital Signs thanks to Bedford and assoc link here
Rising wedges can be either reversal or continuation patterns. When they occur in a downtrend they are always continuation patterns.
Although the news that is pushing the stock higher may be bullish, weak volume is an indication that professionals are not buying, indeed, these investors are using strength to unwind existing long positions and/or establish new short positions.
Rising wedge formations in downtrends are distributive in nature. The fact that price is rising but volume is declining is a good indication that the move higher is illegitimate.
Downside breakouts often lead to small 2-3% declines followed by an immediate test of the breakout level. If the stock closes above this level (now resistance) for any reason the pattern becomes invalid."
Rising wedges can be either reversal or continuation patterns. When they occur in a downtrend they are always continuation patterns.
Although the news that is pushing the stock higher may be bullish, weak volume is an indication that professionals are not buying, indeed, these investors are using strength to unwind existing long positions and/or establish new short positions.
Rising wedge formations in downtrends are distributive in nature. The fact that price is rising but volume is declining is a good indication that the move higher is illegitimate.
Downside breakouts often lead to small 2-3% declines followed by an immediate test of the breakout level. If the stock closes above this level (now resistance) for any reason the pattern becomes invalid."
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