Ending Diagonal
An ending diagonal is a wedge-shaped motive pattern that appears specifically in the Wave 5 or Wave C position. It tells you the preceding trend has gone too far, too fast and is about to reverse. The pattern consists of five waves that all subdivide into threes (3-3-3-3-3), which is different from a standard impulse where waves 1, 3, and 5 subdivide into fives. Both trendlines converge, creating a narrowing wedge. Wave 4 always overlaps Wave 1 territory, which would be a violation in a normal impulse but is a defining characteristic here. Waves 3 and 5 are progressively shorter than their predecessors, showing declining momentum. The classic throw-over occurs when Wave 5 briefly pierces the upper trendline before reversing hard. Once an ending diagonal completes, the reversal is usually swift and violent, retracing at least back to where the diagonal began. This makes it one of the most actionable patterns in the entire Elliott Wave toolkit. Spotting one gives you a high-confidence short setup with a tight stop above the Wave 5 high.
Apple completes Waves 1 through 4 of a large impulse advance. Wave 5 starts strong but then the sub-waves begin overlapping, forming a rising wedge from $175 to $195. Wave 5 of the diagonal pokes above the trendline to $196, then reverses. Within three trading sessions, price drops back to $175, erasing the entire diagonal. You shorted at $194 with a stop at $197 for a clean 3:1 reward-to-risk trade.