Ascending Tops

Ascending Tops are a series of peaks displayed on a stock chart, each peak is higher than the previous one.

Ascending Tops

Ascending Tops are a series of peaks displayed on a stock chart, each peak is higher than the previous one.


Ascending Tops Calculation

The chart below illustrates a series of three ascending tops.

Stock chart showing ascending tops

Ascending Tops Interpretation

Ascending tops suggest an ongoing very strong bull market with the most previous top acting as a support level.  When the support level is broken (on the downside) then the support level becomes a resistance level.  Ascending tops have the same bullish meaning on any trading time frame (minute, daily, weekly,  monthly).

Ascending tops look like very peaceful patterns, but this formation often precedes major corrections.  This is because the pattern has produced so many new swing highs, at some point all of the longs are on board and the only place left to go is down.  A safe measure would be to place a stop below the most recent support level.

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