A diagonal that appears as wave 5 of an impulse or wave C of a correction. Signals exhaustion of the trend. Followed by a sharp and deep reversal.
Description
An ending diagonal appears at the termination of a larger wave — as wave 5 of an impulse or wave C of a zigzag/flat. It takes a contracting wedge shape, with each sub-wave being a 3-wave corrective structure (3-3-3-3-3). The ending diagonal signals that the prior trend is exhausted and a significant reversal is imminent.
Key Points
- Position: wave 5 of an impulse, or wave C of a zigzag or flat
- Sub-wave structure: 3-3-3-3-3 (most common) or 5-3-5-3-5 (rare)
- Contracting wedge shape (most common); expanding wedge (rare)
- After an ending diagonal completes, the reversal typically retraces the entire diagonal very quickly
- Throw-over at the end of the diagonal: wave 5 briefly exceeds the upper trendline before reversing sharply
- High-confidence signal: an ending diagonal at the end of wave 5 → significant decline follows
