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Gold/Mining/Energy : Gold & Gold Stock Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Little Joe who wrote (1279)	2/1/2004 11:04:32 AM
From: Andrew	Read Replies (2) \| Respond to of 29622

Hi LJ, well here is my attempt to explain my use of wedges a bit more deeply. These are my deep trading secrets <VBG> These give good examples of what they look like. stockcharts.com stockcharts.com Generally a falling wedge is a bullish chart pattern because unless something is seriously wrong they usually resolve to the upside. In a falling wedge you have 2 falling trendlines that are converging. The price must resolve one way or the other before the lines meet. I have found that the shaper the angle of decent the higher the likely hood of an upside breakout. You can note that with all the charts that I posted they exhibit this pattern. Now no charting pattern or indicators are infallible but combined with the MACD being in very oversold territory and beginning to turn up with the falling trendlines converging the % of success is fairly high. IMO do not use log charts, keep it linear. Log distorts trendlines. This does not mean that the price cant break out upward and then continue downward again also. With these Gold charts We also have 200 day MA's and longterm trendline support in addition so I'm feeling pretty confident. Rising wedges are even better than falling wedges. They resolve to the downside almost always. An example was the sharply rising wedge in the HUI and XAU up to DEC 2. Upper and lower trendlines converging. It is not really possible for the price to break out upward on an index. The price would have to go parabolic rising geometrically each day. It is again possible for the price to breakout sideways and start a new uptrend but by combining the MACD cross down I find this to be highest % technique, over 90% success. This is why I prefer shorting and 90%+ of my active trading is shorting even in up markets. I find rising wedges in 10 min 30 min and 60 min charts of IBM or DELL MSFT or some other big cap and short on the break down out of the wedge with the MACD crossing down. The trick here is to be disciplined and take .25 or .50 at a time and wait for the next setup. I've been told you cant make money like that, LOL quarters add up quick when your banging around a few thousand shares. Here is a 10 day 15 min chart of Goldcorp. This is micro compared to those daily charts but you will see what I mean. chart.bigcharts.com On this chart you can see there is a falling wedge on the left side of the chart and that in the middle of the chart on late Monday an upward spike started and the MACD turned positive and the following day the price jumped from 13.40 area to about 14.00. For this trade to have a high success rate one should wait for the upper falling line resistance to break with the MACD positive.