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stock market trading chart pattern research CEPH
Friday, May 26, 2006

Stock Trading

If you trade stocks online, invest in stocks, trade the stock market, looking for advise on how to trade stocks effectively and looking for the tools to effectively trade the stock market. Including the right tools to research for investing, or day trading or swing trading. Including but not limited to penny stocks and high beta momentum then this tutorial is for you. Technical Analysis Update

Technical Analysis Chart

Cephalon Inc (CEPH on NASDAQ)
Industry: Pharmaceuticals, Biotech and Chemicals

Event Details for: Continuation Wedge (Bullish)
A Continuation Wedge (Bullish) is considered a bullish signal, indicating that the current uptrend may continue. Prices edge steadily lower in a converging pattern i.e. there are lower highs and lower lows. The technical event occurs when prices break above the upper trendline, thereby confirming the pattern. More...
Event Date: May 26, 2006
Opportunity Type: Intermediate-Term Bullish
Close Price: $59.14
Target Price Range: $82.00 - $88.00
Price Period: Daily
Volume: 940,200
Pattern Duration: 54 days
Inbound Trend Duration: 186 days

 

Stock Chart Of CEPH

Technical Event Educational Material
Continuation Wedge (Bullish) Classic Pattern

Implication

A Continuation Wedge (Bullish) is considered a bullish signal. It indicates a possible continuation of the current uptrend.

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Description

A Continuation Wedge (Bullish) consists of two converging trend lines. The trend lines are slanted downward. Unlike the Triangles where the apex is pointed to the right, the apex of this pattern is slanted downwards at an angle. This is because prices edge steadily lower in a converging pattern i.e. there are lower highs and lower lows. A bullish signal occurs when prices break above the upper trendline.

Over the weeks or months that this pattern forms the trend appears downward but the long-term range is still upward.

Volume should diminish as the pattern forms.

continuation wedge of ceph

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Trading Considerations

Pattern Duration

Consider the duration of the pattern and its relationship to your trading time horizons. The duration of the pattern is considered to be an indicator of the duration of the influence of this pattern. The longer the pattern the longer it will take for the price to move to the Target. The shorter the pattern the sooner the price move. If you are considering a short-term trading opportunity, look for a pattern with a short duration. If you are considering a longer-term trading opportunity, look for a pattern with a longer duration.

Target Price

The target price provides an important indication about the potential price move that this pattern indicates. Consider whether the target price for this pattern is sufficient to provide adequate returns after your costs (such as commissions) have been taken into account. A good rule of thumb is that the target price must indicate a potential return of greater than 5% before a pattern should be considered useful. However you must consider the current price and the volume of shares you intend to trade. Also, check that the target price has not already been achieved.

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Criteria that Supports

Volume

Volume should diminish as the pattern forms.

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Criteria that Refutes

Moving Average

The penetration of the 200-day Moving Average by the price is a false bear signal.

Rising or Stable Volume

Volume should diminish as the pattern forms. If volume remains the same or increases this signal is less reliable.

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Underlying Behavior

In this pattern prices edge steadily lower in a converging pattern i.e. there are lower highs and lower lows indicating that bears are winning over bulls. However, at the breakout point the bulls emerge the victors and the price rises.