One Pattern To Locate Potential Topping Action With
It might not work, but when
you have to pick a direction out a neutral pattern like the symmetrical
triangle–I will typically look at which side has the most evidence
on the daily chart to support either a breakdown or perhaps a breakout above
resistance.
In today’s trade I spotted an extended version of
this pattern in RIMM. The stock has been one this year’s great performers,
especially after its most recent price gap higher, due to an earnings release
and the company’s guidance going forward. It’s a great story, but with the stock
having tested a zone of potential Fibonacci resistance (at least that’s what I
penciled in on my charts) between 72.15 – 76.90–I don’t mind looking for set
ups that go against a potentially over-excited crowd reaction to the news.
13:15:07
Extended Intraday Setup Alert
Research In Motion (RIMM)
is testing supports within a 5-minute chart symmetrical
triangle, from yesterday’s highs–off .62 at 70.85. Traders might
look at pattern breaks as a way to enter into short positions, after the issue’s
significant price run up.
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Book ’em Dan ‘O…maybe. The one definite here,
is the use of stop loss measures in case the tsunami sighting was a bit
premature.
Chris Tyler