Zoom - Symmetrical Triangle Breakout
Updated
Nice little continuation pattern developing over the past 7 days. Impending breakout to the upside or downside before the end of the week. Low volume pullback this morning found support at $470 and has been incrementally rising as I write this. This supports the bullish rising wedge forming with the higher lows, confirmed by RSI and volume. Red line shows point of control as $490 for activity over past 7 days. A big candle with lots of volume punching through this area (like September 28), but holding above the triangle could send this stock to $550, which is a target shared by Elliott Wave traders (I need to study up on EW). At any rate, there's a convergence of bullish indicators and chart readings.
I've revised my thesis that this stock is a strong short [at current price]. I've been anchoring to the fundamentals (as all shorts do); a thorough look at RSI shows that divergence is eliminated by looking at multi-day/weekly charts. Strong shorts break apart with a bang, not a whimper. We're going to need to see a massive rising candle and equally destructive sell-off, pushing this stock through at least 2 major support levels in a short period to induce a long term correction. Share your thoughts below on other indicators that point to bearish/bullish activity.
Short term: bullish (first to 490, then 525, then 550)
Long term: bearish (reversion to fundamentals)
Always remember! The stock market can stay irrational longer than you can stay solvent.
I've revised my thesis that this stock is a strong short [at current price]. I've been anchoring to the fundamentals (as all shorts do); a thorough look at RSI shows that divergence is eliminated by looking at multi-day/weekly charts. Strong shorts break apart with a bang, not a whimper. We're going to need to see a massive rising candle and equally destructive sell-off, pushing this stock through at least 2 major support levels in a short period to induce a long term correction. Share your thoughts below on other indicators that point to bearish/bullish activity.
Short term: bullish (first to 490, then 525, then 550)
Long term: bearish (reversion to fundamentals)
Always remember! The stock market can stay irrational longer than you can stay solvent.
Note
Potential bear trap developing. Short interest is extremely high. On lower time frames (3-5m) there is clear divergence: falling price, rising momentum. Watch volume in the last 30 minutes of todays trading session. A hammer candle could pop this up and over the top of the triangle. Not holding my breath. Waiting for confirmation (retest outside triangle) before opening short/long position. Most likely tomorrow AM.Note
Very low volume day - totally inconclusive. Let's see what tomorrow brings us. Guessing more than a few folks had ringing in their ears after watching the debate last night. Who knew the worst sound ever was three guys talking over each other?
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