Long Term Decline
Tracking and observing long term trends like the measured move bearish is part of a practice known as technical analysis. Traders that participate in this methodology track the price points, volume, distribution and performance of their stocks very carefully. Over weeks, months, or sometimes years, patterns will be seen to form, and these patterns can be used to predict whether or not a current trend is going to continue or reverse. It’s important to be able to spot these trends, and interpret their meaning for the health of your own portfolio. .
Before you can fully understand the measured move bearish, you have to be familiar with the terms bullish and bearish, and grasp what they mean for the market. Although it might sound foreign to you, the bull always indicates an upward movement in a stock or industry, while the bear always indicates a decline. Because this pattern is bullish, it usually indicates that a stock is about to enter a period of lost value. Spotting it early might be able to save you from holding on to a declining stock for too long, which could result in a loss, or being strapped with a stock that isn’t performing..
In all its forms, the measured move starts out as a reversal pattern and returns to movement as a continuation pattern. When it’s bearish in bias, the measured move can be spotted by looking for a reversal decline, followed by a period of consolidation/retracement, and finally a period of continuation decline. It’s important to note that the measured move bearish can’t be confirmed until it has moved past the consolidation/retracement period, and officially falls into the category of a continuation pattern. It’s also important for investors to realize that this is a long-term pattern that forms over a few months.