Updated
ACB Descending Triangle - short term very bearish
A temporary pullback would not break the cup and handle pattern on the weekly. In fact, we don't know how deep the handle will be, and considering the size of the cup and handle (on the weekly), we may see a deeper pull back before gaining new bullish momentum.
Thursday and Friday were striking trading sessions for ACB. There were several bearish indicators, all of which that got confirmation, but bounced on the $8.80 support. With the daily and hourly lower highs, we now see the descending triangle pattern revived. This is a trend reversal pattern, and unfortunately, ACB's set up qualifies on many counts, and I closed my entire current position, for now. I had accumulated at the drops, and managed to get out at $8.98 yesterday, with a small - but insignificant - profit.
1) In order to qualify as a continuation pattern, an established trend should exist. The robustness of the formation is more important than the lenght.
2) Lower Horizontal Line has to be tested at least twice. The lows do not have to be exact, but should be within reasonable proximity of each other. There should be some distance between the lows and reaction highs.
3) At least two reaction highs are required to form the upper descending trend line. These reaction highs should be successively lower and there should be some distance between them highs.
4) If a more recent reaction high is equal to or greater than the previous reaction high, then the descending triangle is not valid.
5) The length of the pattern can range from a few weeks to many months, with the average pattern lasting from 1-3 months. ACB's triangle will be headed for 1 month somewhere next week
6) Volume: As the pattern develops, volume usually contracts.
What to expect?
1) When it breaks to the downside, we may see increased volume for confirmation, but increased volume is not necessary to drive the price down. Once she goes, she goes.
2) After she breaks, we may see a quick return to the $8.80 level, but this will now be resistance.
3) After she breaks, the price projection is found by measuring the widest distance of the pattern (the left side) and subtracting it from $8.80-ish.
Thursday and Friday were striking trading sessions for ACB. There were several bearish indicators, all of which that got confirmation, but bounced on the $8.80 support. With the daily and hourly lower highs, we now see the descending triangle pattern revived. This is a trend reversal pattern, and unfortunately, ACB's set up qualifies on many counts, and I closed my entire current position, for now. I had accumulated at the drops, and managed to get out at $8.98 yesterday, with a small - but insignificant - profit.
1) In order to qualify as a continuation pattern, an established trend should exist. The robustness of the formation is more important than the lenght.
2) Lower Horizontal Line has to be tested at least twice. The lows do not have to be exact, but should be within reasonable proximity of each other. There should be some distance between the lows and reaction highs.
3) At least two reaction highs are required to form the upper descending trend line. These reaction highs should be successively lower and there should be some distance between them highs.
4) If a more recent reaction high is equal to or greater than the previous reaction high, then the descending triangle is not valid.
5) The length of the pattern can range from a few weeks to many months, with the average pattern lasting from 1-3 months. ACB's triangle will be headed for 1 month somewhere next week
6) Volume: As the pattern develops, volume usually contracts.
What to expect?
1) When it breaks to the downside, we may see increased volume for confirmation, but increased volume is not necessary to drive the price down. Once she goes, she goes.
2) After she breaks, we may see a quick return to the $8.80 level, but this will now be resistance.
3) After she breaks, the price projection is found by measuring the widest distance of the pattern (the left side) and subtracting it from $8.80-ish.
Note
I should add that this pattern may continue for many weeks more, and could even drag us all the way to the next earnings call on May 9... We'll see.Note
And of course, who is to say where this pattern started. Maybe we are only just about to close the gap...Note
And finally, here are some levels that I see...Note
...and of course, I am long term bullish on ACB. Here is the revised cup & handle:Note
Gosh, I did not expect this to happen immediately, but it did...
🅱🄰🆁🅺🆆🄾🆁🆃🅷
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
🅱🄰🆁🅺🆆🄾🆁🆃🅷
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.