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Originally posted by skiracer
With respect dude, it's a no-brainer wedge on the 60 minute dude. Clearly qualifies because:
* meets the "both lines sloping down" rule
* meets the converging lines requirement (i.e. coming to an apex)
* meets the diminishing volume requirement (since Thursday anyway)
* meets the price up/down fluctuation decisiveness requirement (check out the wick at the tops of the up and tails at the bottom of the wicks)
* meets 5 touchpoints requirement
* I think an hourly charts need only 3 to 5 days to develop as distinct for 3 to 5 weeks for a daily chart, which is a condition it's met. Ya gotta creatively consider price fluctuation of an hourly chart on a relative basis to a daily chart, and it's clear there is plenty of price action in that chart to show there are decisive price moves that is converging into a point and wedging down......
So in reality ski, I don't think my call is far away from the true definition at all.
And while on the topic of wedges..........for anyone interested in patterns and support/resistance, channels and trendlines, and gap theory, I would highly recommend the summary posted by denpup over at ttrader.com of Edwards & Magee's book "Tech Analysis of Stock Trends".
It's a very good summary worth a read.
" Wedge Formations (Chapter 10 Technical Analysis of Stock Trends, Edwards and Magee)
Definition: Pattern somewhat similar to triangles in which frequent price fluctuations are confined by nearly straight converging lines, but different in that both lines slant either up or down. Volume, as in triangles, tends to diminish gradually within wedge. Both lines slope up on a rising wedge, down on a falling wedge. Pattern of rising wedge denotes weakening of price structure.
* Unless pattern is quite compact with frequent fluctuations, nicely bounded by converging lines, and unless up or down orientation is decisive, wedge designation is doubtful. If one line is nearly horizontal, safer assumption is a right triangle. Experience helps - this is the part where interpretation is more art than science, perhaps, or more intuition than following a hard and fast rule.
* Normally takes about 3 to 5 weeks to complete (shorter patterns called pennants). Seldom more than 3 months.
Rising Wedge
* Unlike generally bullish right triangles, rising wedge has no barrier of supply to overcome (usually followed by price surge) but instead indicates a gradual petering out of interest. When demand fails, trend reverses. The converging lines focus on a point near where a reversal may be expected. Decline usually rapid once prices break out to downside.
* Develops as a topping-out pattern of uptrend or forms at bottom of downtrend. Prices most always stay within wedge boundaries for at least 2/3 of distance from base (beginning) to apex. May rise all the way to apex or even push out at top in last-gasp rally before collapse.
* Rising wedge is characteristic of bear market rallies. (This fact may be especially notable now when, after extensive decline, traders and investors question whether a new bull trend is forming. The appearance of wedges would indicate that the primary trend is still down.) "When a major bear swing ends in a head-and-shoulders bottom, the last rising wedge will often appear as prices rally from the left shoulder to the neckline, and just before they break down to the head (final low). " Rising wedge on arithmetic weekly chart is a bear market phenomenon-indicates slackening of enthusiasm that normally accompanies reactions against prevailing primary trend.
Projection: Drop usually retraces all ground gained within wedge and sometimes more.
Falling Wedge
Price breakout, unlike the swift decline from a rising wedge, tends to drift sideways or in dull "saucering-around" move before a rise. Trader can take his time to commit at breakout from a falling wedge.
Best to all and good luck this week.
Definition: Pattern somewhat similar to triangles in which frequent price fluctuations are confined by nearly straight converging lines, but different in that both lines slant either up or down. Volume, as in triangles, tends to diminish gradually within wedge. Both lines slope up on a rising wedge, down on a falling wedge. Pattern of rising wedge denotes weakening of price structure.
* Unless pattern is quite compact with frequent fluctuations, nicely bounded by converging lines, and unless up or down orientation is decisive, wedge designation is doubtful. If one line is nearly horizontal, safer assumption is a right triangle. Experience helps - this is the part where interpretation is more art than science, perhaps, or more intuition than following a hard and fast rule.
* Normally takes about 3 to 5 weeks to complete (shorter patterns called pennants). Seldom more than 3 months.
Rising Wedge
* Unlike generally bullish right triangles, rising wedge has no barrier of supply to overcome (usually followed by price surge) but instead indicates a gradual petering out of interest. When demand fails, trend reverses. The converging lines focus on a point near where a reversal may be expected. Decline usually rapid once prices break out to downside.
* Develops as a topping-out pattern of uptrend or forms at bottom of downtrend. Prices most always stay within wedge boundaries for at least 2/3 of distance from base (beginning) to apex. May rise all the way to apex or even push out at top in last-gasp rally before collapse.
* Rising wedge is characteristic of bear market rallies. (This fact may be especially notable now when, after extensive decline, traders and investors question whether a new bull trend is forming. The appearance of wedges would indicate that the primary trend is still down.) "When a major bear swing ends in a head-and-shoulders bottom, the last rising wedge will often appear as prices rally from the left shoulder to the neckline, and just before they break down to the head (final low). " Rising wedge on arithmetic weekly chart is a bear market phenomenon-indicates slackening of enthusiasm that normally accompanies reactions against prevailing primary trend.
Projection: Drop usually retraces all ground gained within wedge and sometimes more.
Falling Wedge
Price breakout, unlike the swift decline from a rising wedge, tends to drift sideways or in dull "saucering-around" move before a rise. Trader can take his time to commit at breakout from a falling wedge.
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