Okay kids, the CEMJQ chart continues to consolidate, and let's take a little deeper look into what it is telling us.
Since we have peaked at 1.48 a lil' ole pattern has developed here...and it's called a falling wedge pattern...A little info on it below...
Falling Wedge: We are currently trading in a falling wedge pattern, which is a pattern that develops within a bullish trading pattern or uptrend. This trading channel is a form of consolidation, and once it has finished forming the wedge, look for it to break out to the upside of the top of the channel. The more it touches each channel the stronger it becomes in regard to the breakout move.
The chart indicates a couple areas of support beyond the 55ema at .89. I've drawn a couple of support lines that were once resistance lines if you look at the left side of the chart.
I bet you are asking yourself, why in the hell is this happening? Well, not all stocks can go straight up, unless you are VRMLQ or DNDN!!! Those are some fun charts to look at.
It's healthy for real up-trends to have these rounds of consolidations. What causes them? Easy. Profit-takers and traders. Traders saw that 1.50 was the key resistance on the chart during the recent uptrend, and started taking profits, and others decided that they didn't want to sit in this stock for too long.
Investopedia Definition of Wedge:
Wedge
What Does Wedge Mean?
A technical chart pattern composed of two converging lines connecting a series of peaks and troughs.
A technical chart pattern composed of two converging lines connecting a series of peaks and troughs.
Falling wedges indicate temporary interruptions of upward price rallies. Rising wedges indicate interruptions of a falling price trend. Technical analysts see a 'breakout' of this wedge pattern as either bullish (on a breakout above the upper line) or bearish (on a breakout below the lower line)
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