QQQ Dominant Pattern: Rising Channel NOT Rising Wedge
There have been quite a few posts here and elsewhere regarding a rising wedge pattern in the QQQ. The trouble with continually extending the upper line on every tick higher is that it paints a false picture. In my humble opinion, QQQ broke through the upper line of the wedge back on November 4th, backtested it a few days and has proceeded to move higher.
The current pattern is actually a Rising or Up Channel.
We will be looking for short opportunities on a break AND close below the lower up sloping line of the channel. Once we have entered our position, we will watch QQQ's price action as it nears the upper line of the former rising wedge pattern. If this level fails to hold, it will provide confirmation that the recent upside move to new highs was simply an overthrow and price will likely to retrace back to lower, rising line of the rising wedge.
Our guess is the pattern will eventually shift to a broadening wedge.
The current pattern is actually a Rising or Up Channel.
We will be looking for short opportunities on a break AND close below the lower up sloping line of the channel. Once we have entered our position, we will watch QQQ's price action as it nears the upper line of the former rising wedge pattern. If this level fails to hold, it will provide confirmation that the recent upside move to new highs was simply an overthrow and price will likely to retrace back to lower, rising line of the rising wedge.
Our guess is the pattern will eventually shift to a broadening wedge.
AlgoTrend Capital LLC