$MATIC : Possible Cat Ears Pattern; a small study.
Possible Cat Ears pattern, note that i said possible.
A cat ears pattern is found after a downtrend and consists of two "ears" which you can see above. Its a downtrend continuation pattern but it has a HIGH FAILURE RATE which means you are probably better off looking for long setups on it.
A cat ears pattern has 6 variations, follow the link here and you can see for yourself on Thomas Bulkowskis website:
(Look at the picture with 6 variations, example #3)
www.thepatternsite.com/CatsEars.html
One variation is as follows:
-Downtrend
-Sideways trading
-Spike one (1st ear, higher)
-Sideways trading
-Spike two (2nd ear, lower)
We are in the middle of spike two, its currently trying to hold the 0.618 fib as support, BUT if this does not hold and we come down to the outlined breakout level then we can see a rejection or breakout of the car ears pattern.
So we watch, if it comes down to the bottom breakout level, it can fakeout below the support then close above, breaking the diagnol downtrend resistance line. Or the pattern plays out, but altcoins are looking quite good atm so i doubt that, Theres a chance we dont even come down to finish painting the 2nd ear and go from here.
This idea is pure theoritcal and im only posting it to backtrack on later to see if we complete the pattern and how it does play out.
A cat ears pattern is found after a downtrend and consists of two "ears" which you can see above. Its a downtrend continuation pattern but it has a HIGH FAILURE RATE which means you are probably better off looking for long setups on it.
A cat ears pattern has 6 variations, follow the link here and you can see for yourself on Thomas Bulkowskis website:
(Look at the picture with 6 variations, example #3)
www.thepatternsite.com/CatsEars.html
One variation is as follows:
-Downtrend
-Sideways trading
-Spike one (1st ear, higher)
-Sideways trading
-Spike two (2nd ear, lower)
We are in the middle of spike two, its currently trying to hold the 0.618 fib as support, BUT if this does not hold and we come down to the outlined breakout level then we can see a rejection or breakout of the car ears pattern.
So we watch, if it comes down to the bottom breakout level, it can fakeout below the support then close above, breaking the diagnol downtrend resistance line. Or the pattern plays out, but altcoins are looking quite good atm so i doubt that, Theres a chance we dont even come down to finish painting the 2nd ear and go from here.
This idea is pure theoritcal and im only posting it to backtrack on later to see if we complete the pattern and how it does play out.