How to run the wedge to determine the trend Money Tips

Category: Money tips Release Date: 2006-02-10

Nanjing Gu Q: The stock analysts often see a wedge-shaped article, saying I do not know what it means to wedge in the end?

A: The wedge is a kind of stock in the two converge in the same direction and were shaking up and down between a straight line features a graphic in which the above line as is the upper limit line, but following a straight line known as the lower limit line. In general, the wedge consists of two forms: rising and falling wedge wedge, which are formed by long-short two sides in a dispute over the status of the disk Bureau. In practice, often follow the following rules:

1. Most of the wedge is formed in the mid-price trends, and the general rise in stock prices will show a wedge-shaped showed a downward trend in the future; drop wedge will show the performance of future stock price may rise.

2. Wedge shape with the triangle, like the formation of the need for a time course, in general, require the completion of wedge-shaped more than two weeks time.

3. Like other continuous forms, wedge-shaped formation of the co-ordination are also requirements, but also in the process of forming a general view of its volume is gradually shrinking. At the same time, in the form of volume at the end of the tie will be necessary, especially the decline in the late wedge upward breakthrough.

4. If the wedge at the end of the trend reversal is generally form the location of its breakthrough at the highest price and the lowest for at least two-thirds between the location, of course, sometimes at the end of the wedge.

Shanghai Composite Index above example, this week that although the three stock indexes broke the previous low, while another homeopathic stock index edged down Thursday, Friday once again ascribed to come down. Therefore, there are two possibilities afternoon, a short-term to continue to run low, then the trend should be attributed to the recent decline in wedge-shaped, but the magnitude will not be too much; Another possibility is that recently re-point and revert to a few days ago, this graphic illustration of the recent decline in the triangle have not yet destroyed. The current situation, out of the wedge is more likely to drop, but it can not be confirmed that under the pre-breaking lows. In fact the trend Thursday that 1750-point support is still relatively strong. But no matter how these two are probably implies that the recent drop is temporary, and verified the location of the bottom is not far away.

(Hangzhou New Hope Zhang Ye)