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LONG TERM WEDGE PATTERN LOOMING

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The recent rally to new yearly highs hasn't materialized in all the major indices. In fact, the Nasdaq Composite has lagged rather badly; thus it is either 'poised to catch up' or it will become the leaders once the cyclical bull market ends. We dont know when that will be; but our fulcrum point for adding to technology short positions will be upon the Composite breaking below its 60-week moving average at 1998...only 72 points below current levels.

That said, the larger bearish wedge pattern is also looming; a breakdown to 1900 would confirm this longer-term pattern. This isn't todays business as many of the traditional bearish signals seen at tops is only just beginning to materialize. However, it pays to have a game plan going forward...and technology short exposure is a good strategy as price declines materialize.

Chip Anderson
About the author: is the founder and president of StockCharts.com. He founded the company after working as a Windows developer and corporate consultant at Microsoft from 1987 to 1997. Since 1999, Chip has guided the growth and development of StockCharts.com into a trusted financial enterprise and highly-valued resource in the industry. In this blog, Chip shares his tips and tricks on how to maximize the tools and resources available at StockCharts.com, and provides updates about new features or additions to the site. Learn More
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