Replies to post #72937 on Medinah Minerals (MDMN)

[hlsh]

nice chrt 'kezzek' ; maybe a bottom call / current .0149

[Hurricane_Rick]

Actually, the "crap" chart as you call it, is a textbook example of a descending (falling) wedge reversal unfolding. I see a potential run to .019-.02 in the near term. Volume on the breakout will be key. The new year (fresh post-holiday buying) and the underlying fundamentals of Auryn moving ahead with the exploration program on ADL are both potential catalysts contributing to the breakout of the pattern. Let's see how this "crap" unfolds.



To further your education on the descending wedge reversal pattern, you may want to brush up on the following explanation of the pattern:

http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patterns:falling_wedge_reversal

1. Prior Trend: To qualify as a reversal pattern, there must be a prior trend to reverse. Ideally, the falling wedge will form after an extended downtrend and mark the final low. The pattern usually forms over a 3-6 month period and the preceding downtrend should be at least 3 months old. CHECK

2. Upper Resistance Line: It takes at least two reaction highs to form the upper resistance line, ideally three. Each reaction high should be lower than the previous highs. CHECK

3. Lower Support Line: At least two reaction lows are required to form the lower support line. Each reaction low should be lower than the previous lows. CHECK

4. Contraction: The upper resistance line and lower support line converge to form a cone as the pattern matures. The reaction lows still penetrate the previous lows, but this penetration becomes shallower. Shallower lows indicate a decrease in selling pressure and create a lower support line with less negative slope than the upper resistance line. CHECK

5. Resistance Break: Bullish confirmation of the pattern does not come until the resistance line is broken in convincing fashion. It is sometimes prudent to wait for a break above the previous reaction high for further confirmation. Once resistance is broken, there can sometimes be a correction to test the newfound support level. CHECK

6. Volume: While volume is not particularly important on rising wedges, it is an essential ingredient to confirm a falling wedge breakout. Without an expansion of volume, the breakout will lack conviction and be vulnerable to failure. Awaiting