Symmetrical Triangles that appear after a long bullish move are trickier to play than those that appear after a long bearish trend. Why? Because the pattern will sometimes breach the upper line of the triangle and soon thereafter reverse direction. Thus, money management is vital.
What to watch for:
Long Case: A break above the downsloping line of the triangle on higher than usual volume would indicate a potential move higher. In the case of SMH our target would be $95.
Short Case: A break below the upsloping line of the traingle on higher than normal volume would indicate a potential move to the downside. Our target would be set at $87.
What to watch for:
Long Case: A break above the downsloping line of the triangle on higher than usual volume would indicate a potential move higher. In the case of SMH our target would be $95.
Short Case: A break below the upsloping line of the traingle on higher than normal volume would indicate a potential move to the downside. Our target would be set at $87.
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Correction: Short Case initial downside target would be $77
AlgoTrend Capital LLC