Find Out Why The Bears Are In Control Of This Stock
Today’s stock pick i less about price and levels and more about a chart pattern, which traders should also familiarize themselves with. In this case, we are watching a bearish pattern known as a rising wedge on Marriott (MAR). As you can see in the video, when looking on a higher time frame, you can see candle sticks forming what looks like a wedge as prices push a bit higher.
However, despite prices continuing to rise, this pattern often signals lower prices or a drop of some kind is in the cards. These chart patterns have more validity when two things occur. One, when you see them on the higher timeframes, like on the daily chart. And two, when they are so clearly seen that you cannot be the only trader seeing the pattern.
You much remember, when looking at price levels (support or resistance) or chart patterns, they need to be clear enough that the rest of the market can see them as well. It’s a market, not just you against stock. If no one else takes the trade or sees the set up then the outcome may not happen like you think.
In other words, this is only a bearish pattern because the rest of the market sees it as such and acts on it accordingly. So, be sure when trading chart patterns that they are clearly defined and you know which direction this means prices will head.
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