Wedging Rally Quotes

“The action of a wedging rally or a bear flag occurs after a prior price breakdown, and the two formations are really just different versions of the same phenomenon. The difference is that a wedging rally following a prior price break or downtrend occurs as a stock bounces while a bear flag occurs when there is not a significant bounce and the stock just moves sideways. In both cases, the stock is consolidating the prior downside move.”
― Gil Morales, Short-Selling with the O'Neil Disciples: Turn to the Dark Side of Trading

“Wedging rallies up into the 50-day moving average, or any other moving average for the matter, rarely stop exactly at the moving average itself. It is very common for a stock to rally just past a key moving average, only encountering resistance once it has rallied 2–3 percent and sometimes as much as 5 percent or more beyond the moving average. The key is to watch how the stock acts as it moves above the moving average and be on the lookout for voodoo days or a high-volume outside reversals to the downside.”
― Gil Morales, Short-Selling with the O'Neil Disciples: Turn to the Dark Side of Trading