Ending diagonals are impulsive waves characterized by overlap and occur in the 5th wave and C wave positions. They signify exhaustion of a larger movement, typically at the termination point of the pattern. Each wave in an ending diagonal subdivides into 3 waves instead of 5.
The most common form is the contracting ending diagonal, where boundary lines converge. A notable tendency within ending diagonals is the phenomena of underthrow and overthrow; underthrow occurs when the 4th wave dips below the support trend line, leading to an expected overthrow in the 5th wave, potentially exceeding the resistance trend line. Conversely, if there is no underthrow, the 5th wave might fall short of the upper resistance line.
Typically, an ending diagonal is followed by a sharp decline that retraces at least to the starting level of the pattern, and often much further.
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