Rolls-Royce – Alarm Bells Ringing: Ending Diagonal Risk

📉 Asset

Rolls-Royce Holdings (XETR: RR)

⏱️ Timeframe

3-Day

🎯 Pattern

Ending Diagonal (terminal rising wedge)

✅ Why It Matters

Terminal patterns exhaust buying pressure and often reverse in gap-like,
high-velocity moves that hunt stops.

🔎 Chart & Replay

The thirty-plus candles printed since the 6.58 € low appear powerful, yet every
technical tell-tale says “correction, not impulse.” Each thrust overlaps the
one before it; candle bodies shrink; volume thins. That trio of symptoms
defines an Ending Diagonal—Elliott Wave’s warning flare that the trend is
running on fumes.

The wedge’s lower boundary—shown as a white rising guide-line on the sketch—is
more than cosmetic. Psychology compresses against it: dip-buyers lean on the
line, sceptical shorts wait beneath it, and algorithms are tuned to its slope.
While closes park on or above the boundary, price may grind a little higher,
tempting late momentum players. But once the line gives way, the market tends
to skip polite pull-backs and instead fires into a jagged B-wave filled
with vicious up-down spikes. These first few bars often appear as a gap or as
a single outsized candle—exactly the moves that rip through tight stops.

Because every price label on the diagram is intentionally schematic, traders
should anchor their plans to the live wedge, not to the numbers in the picture.
The job is simple but strict:

For wedge-riding bulls

• Keep positions small.
• Move stops to each new higher-low without exception.
• Accept that reward diminishes with every centimetre gained inside the wedge.

For reactive bears

• Wait for a firm, end-of-session close under the wedge floor (intrabar stabs
  are common traps).
• First profit target is the last visible consolidation; secondary targets lie
  much deeper once the C-wave engages.
• Risk caps must sit far enough away to survive B-wave whiplash.

Why such caution? Ending Diagonals are notorious for erasing weeks of steady
climb in a fraction of the time—often before traders can re-quote orders.
Leverage magnifies that risk; gap moves can skip stop limits and force market
liquidations at the worst possible prints.

Fundamentals still look friendly—engine orders, service contracts, and a
recovering wide-body cycle—but price is a forward-looking discounting machine.
Structure now overrides story. The wedge says all good news is priced in; a
volatility purge is required before a healthier, impulse-driven advance can
resume.

In short: Respect the line. Plan for the snap. Trade small or stand
aside—terminal wedges rarely forgive hero size.

Closing: cakirinsights.com