Thursday, July 9, 2015

Wells Fargo $WFC: bearish ascending wedge?

Let's look at the daily chart of Wells Fargo:

I interpret this chart as a possible 7-month bearish ascending wedge with a 1-month H&S top in the last part of the wedge. A smaller pattern within a larger pattern can often launch a breakout from the larger pattern. Also, I sometimes see prices trade above the upper boundary of an ascending wedge, as they did here, before they return inside the pattern and break down.

These are mere possibilities and never guarantees. That said, I always find interesting the pattern-within-a-pattern as it can provide an early entry point or additional support for a particular interpretation. But there is a risk to such fascination: I must be careful not to obsess over a particular outcome and ignore the actual price action. I will re-evaluate my interpretation should prices close above the right shoulder high of the H&S top.

1 comment:

  1. Thanks Brian B.Kim! Thank you for clearing all my concepts. I do agree with you there are mere possibilities and never guarantees and you have to consider each and every point before proceeding ahead.
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