Ascending bases are rare to see on the charts, but they can be explosive especially when they are appearing during a market correction. This pattern shows the stock has massive power behind it as it creates higher highs and higher lows while the rest of the market pulls back or corrects through time. It can appear without a market correction.
You will get to see a bunch of ascending base charts below.
For more information on Ascending bases check out these two links from IBD:
Ascending Base A Sneaky Stock Chart Pattern That Can Lead To Successful Breakouts
Rare Ascending Base Can Lead To Powerful Gains
An ascending base consists of three consecutive pullbacks, each with higher highs and higher lows, resembling a staircase pattern.
Identifying an Ascending Base
To identify an ascending base:
- Look for a strong stock in an uptrend, often outperforming the market
- Observe three distinct pullbacks, each with higher lows than previously
- Confirm that the pattern is forming over 9-16 weeks
- Check that pullbacks are limited to 10-20% and often find support at the 10-week or 50-day moving average
Trading the Ascending Base
The buy point for an ascending base occurs when the stock price rises $0.1 higher than the high point from which the third pullback began
Traders should look for:
- A breakout on increased volume, at least 40% larger than average
- A relative strength line near new highs, indicating market outperformance
- Strong fundamentals, such as solid earnings growth prospects
Ascending bases can lead to powerful gains, as they often occur in leading stocks that are poised to continue their advance once broader market resistance disappears
