UYG: Bearish Rising Wedge

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Off the 10AM low of 20.05, the UYG had a Bearish Rising Wedge rally to 20.95. Notice that there were three solid hits to the lower trendline prior to the final push to 20.95. The third tag is called a trendline validation. A bounce there is telling us, "Yes, that IS SUPPORT." When a validated trendline gets broken, as this one did at 20.52-20.53, it usually has some significance on the downside. There's no ALWAYS in the stock market.

When this trendline broke, the UYG dipped to 20.45, rallied back to a high of 20.52 in the next five minute bar, followed by a high of 20.53 in the next one, then failed. Former 20.52-20.53 support "should be" resistance on a retest. It was. That's a failed retest, and short-term, 20.52-20.53 now is validated resistance.

When a Bearish Rising Wedge is broken, as this one was, that suggests a retest of the bottom of the pattern, which was 20.05. The UYG sold off to 20.09. Targets are "what we're aiming for," so 20.09 is close enough. If the UYG now can hold the 20.05-20.09 Double Bottom, then take out 20.52.20.53 validated resistance, that would turn the short-term picture at least neutral. Much better if the UYG could break out of the Double Bottom, above today's high of 20.95.