Cup and Handle Rising WedgeNEE pulled back from first rising wedge, then recovered to finds itself in another rising wedge. This one is very small and NEE is riding the bottom trendline of the RW
The Rising Wedge is a bearish pattern that begins wide at the bottom and contracts as prices move higher and the trading range narrows. In contrast to symmetrical triangles, which have no definitive slope and no bullish or bearish bias, rising wedges definitely slope up and have a bearish bias.
The upper resistance line and lower support line converge as the pattern matures. The advances from the reaction lows (lower support line) become shorter and shorter, which makes the rallies unconvincing. This creates an upper resistance line that fails to keep pace with the slope of the lower support line and indicates a supply overhang as prices increase.
Basically a RW is formed when there is too much buying without proper pull backs (Irrational exuberance) and the supply and demand gets out of whack. When the time comes, there are not enough buyers left. A RW takes at least 3 weeks to form but can be a very long term pattern. It is only valid if price breaks lower trendline of the RW. A strong stock does not fall far as a rule, but the average is 35%. On the other hand, a stock can fall quite a ways, example, HRC (see my chart on HRC)
Beware of Gap under price at 291ish...but may be a good entry
A momentum name and can be volatile
Possible stop under handle low
NV is very high
Short interest increased today
Not a recommendation
