The rising three methods are a common pattern in technical analysis. It usually appears in an upward trend, indicating that prices may continue to rise. It consists of a large positive line and consecutive small negative lines.
Simply put, the rising three methods are a technical pattern of a continued rise.
The appearance of the rising three methods pattern indicates that there are still a large number of buy orders in the market and prices may continue to rise.
It shows the active participation of buyers during price corrections and their willingness to regain control of the market. This pattern is often interpreted as a buy signal. Investors who see this signal may consider buying or continuing to hold the stock.
The technical pattern characteristics of the rising three methods are as follows:
1. Large positive line:
First, the pattern begins with a relatively large positive line, indicating strengthening bullish forces and rising prices.
2. Consecutive small negative lines:
After the large positive line, there will be several consecutive small negative lines, indicating price corrections or consolidations, but still remaining above the large positive line.
3. Positive line breakthrough:
Finally, the pattern ends with another relatively large positive line, with the price breaking through the previous high and confirming the continuation of the upward trend.
The appearance of the rising three methods pattern indicates that there is still buying pressure on the market and prices may continue to rise.
Investors usually focus on confirming the breakthrough of the positive line. If the price breaks through the previous high and maintains an upward trend, they may consider buying or holding the stock.
Here are two examples to help you better understand the rising three methods:
1. In May 2021, NVIDIA (NVDA) showed a rising three methods technical pattern in an upward trend, indicating that NVIDIA still had a lot of bullish forces in the upward trend. Subsequently, NVIDIA's stock price continued to rise.
2. In July 2022, Apple (AAPL) showed a rising three-methods technical pattern in an upward trend, indicating that Apple still had a very strong bullish force in the upward trend and a higher probability of rising. Subsequently, Apple's stock price continued to rise.
Regarding the rising three methods' technical pattern, you should also note the following points:
1. Confirm the validity of the pattern:
The rising three methods pattern requires strict conditions, including a large positive line, consecutive small negative lines, and a positive line breakthrough. You should wait for the positive line to break through before confirming the validity of the pattern to avoid entering too early.
2. Combine other indicators and analytical methods:
Relying solely on the rising three methods pattern to make investment decisions may not be reliable enough. You need to analyze by combining other technical indicators, trend lines, support and resistance levels, etc. to obtain a more comprehensive and accurate judgment.
3. Pay attention to the market environment and fundamentals:
Technical patterns are only one aspect of market analysis. You should comprehensively consider the market environment and fundamentals such as company performance, industry trends, and market sentiment. The rising three methods technique is a relatively strong bullish pattern and is widely used in trading.