Inside Bar Break of Bullish Rhythm
Note: The historical stock examples given below are for EDUCATIONAL USE ONLY. They ARE NOT to be used to make buy/sell decisions in today's market. For more information, please read the HSR Terms of Use.
Description
With price trading in a very distinct bullish rhythm (consecutive higher highs and higher lows), an inside bar forms that noticeably breaks the momentum of the advance.
Behavior Note: The inside bar should come after the stock is extended and may be preceded by a distribution week.
What you need to know
An inside bar that interrupts a bullish price rhythm is a warning sign that momentum is waning.
Inside bars represent a subtle change in a stock's character that may lead to trend reversals.
Historical Stock Chart Examples 1A & 1B: E Trade Financial (ETFC) 1997
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Click to enlarge 1A
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Click to enlarge 1B
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