The analysis of angles during a stock’s upward movement is an important part of technical analysis. By observing and analyzing the angle of a stock’s price increase, investors can judge the strength of the upward movement, the stability of the trend, and potential reversal points. The following is a detailed introduction:
Classification and Significance of Angles
Gentle Upward Angle: When a stock’s price rises at a relatively gentle angle, it usually indicates that the upward process is relatively stable, and there may be solid fundamental support behind it. Generally speaking, this kind of upward angle is more common in large-cap blue-chip stocks or stocks of companies with stable earnings growth. For example, among the leading stocks in the consumer industry, due to their stable market position and steady earnings growth, the stock price often rises gradually at a relatively mild angle. Stocks with a gentle upward angle may not have large short-term gains, but in the long run, they can bring relatively stable returns to investors and are suitable for long-term investors to hold.
Steep Upward Angle: If a stock’s price rises rapidly at a steep angle, it means that the stock is in a strong upward stage and is often driven by market hotspots, significant positive news, or strong promotion from major funds. This situation is common in some concept stocks, growth stocks, or stocks in industry sectors that are in the spotlight. For example, in the early days of the rapid development of the new energy vehicle industry, due to the high market expectations for the future development prospects of some related leading enterprises, the stock prices of these companies may rise at a steep upward angle.
Stocks with a steep upward angle can bring substantial returns to investors in the short term. However, because of the excessive speed of the rise, they are often accompanied by greater risks. Once the market sentiment turns or the positive factors disappear, the stock price may experience a significant pullback.
45-degree Upward Angle: A 45-degree angle is regarded as a relatively ideal upward angle. When a stock’s price rises at a 45-degree angle, it indicates that the strength and stability of the rise are relatively balanced. Stocks rising at this angle not only have a certain speed of increase, which can bring good returns to investors within a certain period, but also are relatively stable and not prone to large fluctuations. From a technical analysis perspective, stocks rising at a 45-degree angle often move along a stable upward trend line. Investors can judge whether the upward trend has ended by observing whether the stock price effectively breaks below this trend line.
Angle Changes and Trend Judgment
Slowing of the Angle: A gradual slowing of the stock’s upward angle may be a signal that the upward momentum is weakening. This may be due to a decrease in market enthusiasm for the stock or the encounter of significant resistance above. For example, when a stock approaches its previous high during the upward process, due to the pressure of previous trapped investors looking to break even, the stock price may find it difficult to rise, resulting in a slower upward angle. At this time, investors need to closely monitor whether the stock price can break through the resistance level. If it fails to break through effectively, the stock price may experience a pullback or sideways consolidation.
Steepening of the Angle: A sudden steepening of the upward angle may mean that new positive factors have emerged, driving the stock price to rise rapidly. However, it may also be a short-term impulsive rise, a manifestation of excessive market sentiment, and is often difficult to sustain. For example, after some stocks
Case Analysis
From December 2021 to February 2022, the WTI crude oil futures price rose at an angle close to 45 degrees, increasing from $62 to $95. After the outbreak of the Russia-Ukraine war, the price of crude oil accelerated its increase at an angle close to 90 degrees. Just as we mentioned earlier, when the price rises at an angle close to 90 degrees, it is often followed by a significant price adjustment.
The CME corn futures experienced a significant increase from August 2021 to May 2022. During the entire upward process, the angle of the price increase underwent three changes. First, it rose at an angle close to 45 degrees. Then, in the second stage, it increased at an angle of 60 degrees. During the period of the Russia-Ukraine war, it rose at an angle close to 80 degrees. When the price rises at an angle close to 90 degrees, it is often accompanied by a substantial adjustment in price
The Nasdaq 100 futures experienced a sharp decline from February to April 2025. In the second stage, it dropped at an angle close to 90 degrees, and the market was filled with panic sentiment. As mentioned in this chapter, when the stock index drops rapidly at an angle close to 90 degrees, it is often followed by a strong rebound.
