GameStopLong
GME Falling Wedge pattern - Breakout Imminent!
Updated
The Falling Wedge pattern can be observed here on the 1h chart. Here is why:
1) There are three reaction highs and reaction lows (circled in red) that are currently converging.
2) Volume is tapering off somewhat suggesting that selling pressure is abating.
3) An upwards breakout on a volume spike will confirm the pattern and is a very bullish event. A downwards breakout from the wedge implies a continuation of the downtrend and is thus bearish.
4) If a breakout occurs upwards watch for potential points of resistance near the previous reaction highs.
5) If the price exceeds the reaction highs and manages to consolidate above it, it will become a new support level.
Use indicators such as Chaikin Money Flow to follow where the money is going. CMF down - expect the price to head down. CMF up - expect the price to go up.
Please let me know whether you liked the idea. I personally am a believer in the long position for this stock at this time.
1) There are three reaction highs and reaction lows (circled in red) that are currently converging.
2) Volume is tapering off somewhat suggesting that selling pressure is abating.
3) An upwards breakout on a volume spike will confirm the pattern and is a very bullish event. A downwards breakout from the wedge implies a continuation of the downtrend and is thus bearish.
4) If a breakout occurs upwards watch for potential points of resistance near the previous reaction highs.
5) If the price exceeds the reaction highs and manages to consolidate above it, it will become a new support level.
Use indicators such as Chaikin Money Flow to follow where the money is going. CMF down - expect the price to head down. CMF up - expect the price to go up.
Please let me know whether you liked the idea. I personally am a believer in the long position for this stock at this time.
Note
Update 1) Volume is still decreasing, which I don't particularly like, however the price appears to be resting at 120 as of after hours. We may have a pivotal moment based on the February 26th candles' reaction high. If we break 120 decisively this will become a support. Else, it will be a point of resistance.
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