Bullish measured move or measured move up is a continuation chart pattern which starts as a reversal pattern. This is a three phased formation which forms over several months. The 3 phases of bullish measured move are reversal advance phase, consolidation/correction phase and continuation advance phase.
The requirements of a bullish measured chart pattern include,
- The pattern should form at the end of a strong downtrend.
- The reversal advance phase starts near an established low and lasts for a few weeks to many months. The upward price increase should be orderly; usually forming a price channel. If this uptrend is greatly curved, then the validity of the pattern is greatly challenged.
- The consolidation/correction phase occurs after an extended uptrend. The correction can be up to 63% of the reversal advance. Consolidation patterns such as rectangle chart pattern and ascending triangle or correction patterns such as falling wedge or sloping flag formations should occur at the end of this phase.
- The continuation advance phase usually matches the slope of the first phase.
- The volume should increase at the beginning of both advance phases and should decrease at the end of the consolidation phase.
With bullish measured move, traders can go long at the confirmation of breakout of consolidation/correction phase. Traders should use appropriate price target suiting the continuation pattern at the end of the consolidation phase.
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