-: Crude oil Eod analysis :-
Ascending broadening wedge
As per this pattern Down side expects Targets 5835 – 5233..
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Ascending Broadening Wedge
The ascending broadening wedge is a bearish reversal pattern formed by two diverging upward slants. To confirm an ascending broadening wedge, there must have oscillation between the two lines. Each line must be touched at least twice for validation.
This pattern marks the shortness of buyers. This one is characterized by a progressive reduction of the amplitude of the waves. Indeed, the pattern looks like a bullish channel on which the slope of the support is getting straight as far as the movement continues. In this pattern, the trend is bullish but buyers are struggling to keep control.
The target price is given by the lowest point that resulted in the formation of the wedge.
Here is a graphical representation of an ascending broadening wedge:
Ascending Broadening Wedge
Statistics
Here are some statistics about the ascending broadening wedge:
- In 80% of cases, there is a downward exit
- In 75% of cases, the ascending broadening wedge is a reversal pattern
- In 60% of cases, the target of the pattern is reached once the support broken
- In 21% of cases, a pullback occur on the support
Notes
In 76% of cases, the exit is made in the side of the movement that preceded the shaping of the ascending broadening wedge
– More trend lines of the wedge are sloped, more the downward movement will be violent.
– Bearish breakout are most effective when the movement preceding the shaping of the wedge was long
– Pullbacks are harmful for the performance of the pattern.
– Bearish breakouts are most effective when the price is located in the lower third of the annual range
Trading Strategies
The classic strategy:
Entry: Take a short position at the breakout of the support
Stop: The stop is placed above the support line
Target: Theoretical target of the pattern
Advantage: There are few pullbacks after a bearish breakout
Disadvantage: The target is not often reached (60% of cases), you must determine by yourself your own objectives.
The aggressive strategy:
Entry: Take a short position on a point of contact on the resistance
Stop: The stop is placed above the last highest that has been done
Target: Theoretical target of the pattern
Advantage: In 80% of cases, the exit is downward
Disadvantage: The downward breakout is not yet confirmed
Note :- This is my personal view only,take positions with your own analysis…
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++