Let's talk triangles

Posted by downtowntrader | 12/21/2005 10:14:00 PM | 0 comments »

One of my favorite patterns in a market that has been consolidating is the triangle. It seems like there are a lot of triangles showing in charts so we may be getting ready to make a move here. If you see a bunch of triangles failing, in other words false breakouts, heed the warning and trim back on positions. That usually means the markets will turn sour and that is how it warns us. Failed breakouts are because too many people are anxious to lock in their profits. Here are a few triangles, some have already moved out of the base and others are still testing the trendline.

Motorola is not in a triangle like base, but this may be classified as a pennant. Watch for a close out of the channel. Indicators are looking good as they were deeply oversold.

Good Luck