2020-10-08 • Updated
It’s time to test our technical tools. Do you remember the triangle chart formation? If you don’t, here is the link, with the other triangles and chart shapes – just in case you want to refill your arsenal. Well, here we definitely have a triangle. So let’s set our trades to test it. How do we do that?
The base of the triangle is the level of 450 – it’s the flat horizontal side that works as resistance. Since the end of August, the stock price has never stepped over it. In the meantime, the lows have been coming closer and closer to the upside and formed an upward-sloped side of the triangle. Eventually, 450 is the level where both sides converge, and the breakout is expected to happen. As this is an ascending triangle, bulls are supposed to take over eventually, so 500 would be the target in this case.
Therefore, prepare your positions. First, watch the crossing of 450 upwards. If it happens, the bullish breakthrough scenario should be gaining momentum. Once it happens, be ready to buy above 450 to close at 500.
Otherwise, in a less likely case of bounce downwards, 400 will be crossed first. If the bearish move goes hardcore, it may reach the depths of 330 again.
Don't know how to trade stocks? Here are some simple steps.
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