Ascending Tops

If read correctly, ascending tops can lead to profiting off massive swings.

The idea is pretty simple. An ascending top is formed with the combination of higher lows and higher highs. Common in a bull market, a prime stock is usually within a positive trend upwards.

It is important to remember that these movements won’t last forever. Eventually all buyers will be in and the stock will begin to drop. If you use stops, then a good point would be at the most recent low before the move upward.

Just like many formations, there is also a bearish indicator, which is essentially the complete opposite of ascending tops. Ascending bottoms are created with lower lows and lower highs.