Measured Move Down

  • Usually appears when prices peak after an uptrend
  • Forms a downtrend when stock price moves down then, retraces for a brief period before making a second move down to make a lower low.
  • Prices usually retrace 40% to 60% from the start of the first move down before resuming the descent
  • Retracement period can be a brief uptrend or sideways trend
  • Retracement period can be represented by patterns
  • The highs of the retracement period can act as a future resistance for the stock
  • Effect: Stock prices could go down for the second time if prices break down from the retracement period.
Measured Move Down