Courtesy of Chris Kimble
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The chart above was the quiz of May 15th (see post here) A falling wedge suggests a two-thirds chance that an asset will rise in price. This situation is a little uncommon, in that two falling wedges have taken shape at the same price level/double bottom at (1). As you can see the first falling wedge led to a rather large rally in price. Below is an update to this chart.
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Falling wedges suggest more often than not, a rally is to take place. Add the potential that a double bottom is at hand, increases the odds of a rally.
Why invert a chart? Some say, “buying low and selling high” is a good idea. If you are wanting to hedge a portfolio or want to attempt to score on defense, this chart reflects an opportunity to Buy low is at hand” at (3), with a stop below line (2).
