Hi guys,
So I've noticed this Descending triangle since about late December. Currently with NKLA recent uptrend, its currently battling with this descending resistance trendline. The downtrend began after its blow off top in June 2020. Normally descending triangles are bearish continuation patterns. But sometimes it can act at a reversal pattern if it breaks the descending trend line.
With that being said, the support line only has 2 touch points which may call for more touch points. Hence drop down back to support line.
Volume is extremely important to keep an eye. To trade triangles, you need to wait for confirmation of a breakout outside of the triangle with a candle close outside. To measure potential price targets measure the base of triangle and put it to the down trend or uptrend.
Ive also added RSI which seems to be printing lower highs currently. As shown by the trendline added. Also Stoch RSI is flirting with the 80 level, which may indicate overbought situation. These may indicate not enough juice to break out of triangle to reverse trend.
Please let me know what y'all think. Advice or your insight would be appreciated. Thank you and goodluck.
So I've noticed this Descending triangle since about late December. Currently with NKLA recent uptrend, its currently battling with this descending resistance trendline. The downtrend began after its blow off top in June 2020. Normally descending triangles are bearish continuation patterns. But sometimes it can act at a reversal pattern if it breaks the descending trend line.
With that being said, the support line only has 2 touch points which may call for more touch points. Hence drop down back to support line.
Volume is extremely important to keep an eye. To trade triangles, you need to wait for confirmation of a breakout outside of the triangle with a candle close outside. To measure potential price targets measure the base of triangle and put it to the down trend or uptrend.
Ive also added RSI which seems to be printing lower highs currently. As shown by the trendline added. Also Stoch RSI is flirting with the 80 level, which may indicate overbought situation. These may indicate not enough juice to break out of triangle to reverse trend.
Please let me know what y'all think. Advice or your insight would be appreciated. Thank you and goodluck.
Trade closed: target reached
NIKOLA broke out of the descending triangle pattern that formed after Blow off top in June 2020 followed by months of downward action.When a descending triangle breaks out it acts as a reversal pattern of the trend.
It reached my target and i closed my trade. Will be closely observing NKLA for possible future plays. As i believe more upside has yet to be seen.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.