Ending diagonals are one of my favorite patterns. They are discernible and a high probability trading pattern.
Exxon Mobil, ticker symbol XOM , has been in a strong uptrend since December 1987. As I reviewed the quarterly chart, a terminal ending diagonal caught my eye. I need to know nothing else about where to label the substructure of the larger trend. Why? Because ending diagonal primarily in the fifth wave position. A small percentage occur as the final wave in a corrective wave C. Regardless they are found at terminal points of larger patterns. When complete, price tend to retrace to the origin of the pattern in 1/2 to 1/3 the amount of time it took to create the structure.
Looking forward, Exxon has room to run after completing it's w.4 in a three wave decline. Thereafter, price should make new recovery highs in three waves ( diagonals have 3-3-3-3-3 internal subdivides).
Learning to train your eyes to see these patterns takes time and practice. As an exercise, spend some time looking at the S&P 500 at multiple degrees of trend. Not only will you get a feel for the broader market's health, but you'll also discover many trading opportunities. That's how I discovered this pattern. You will too.
I hope you found this helpful and ....
Best of Trading
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Fair Disclosure Notice: I do not have a position in any of the aforementioned futures markets or securities related to this article.
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