Chart Pattern Analysis 21th: Wedge Patterns, Triangle, Pullback to Resistance

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Channel chart pattern

First pattern for today is the good ol’ Channel pattern, at the Kraft foods stock.

The channel pattern is a classical continuation pattern that shows us the current up trend, with strong boundaries: the lower trend line is the lower boundary of the trend and the upper trend line is the upper boundary of the trend. Price trends between those two lines, and give us good opportunities to make money.

We enter long trades when price hits the support line and begins to reverse upwards.

If price will break the channel downwards we will enter a short trade, and will add up to the position in case of a pullback.

Resistance Pullback

Another interesting chart is at teh Int_Surgcl stock, in which price has started to pull back precisely to the Resistance price level of 410.00

This is generally a bullish signal, and once price creates a candlestick formation that is bullish we will enter a long trade. Note that in such cases, in which trading closes at a tactical level, it is frequent for the price to open in a gap. Therefore it is possible that price will open higher than the price in which it closed on Friday.

Triangle Pattern

In the Las Vegas Sands stock, we can see a very accurate symmetrical triangle chart pattern.

This is generally a continuation pattern, though an unreliable one so we don’t trade it, even if price performs a pullback. This particular pattern seems to break downwards, and it is likely that price will open with a gap downwards.

We recommend not to trade this pattern.

Wedge Chart Pattern at Adidas

A Wedge pattern appeared at the Adidas stock.

The Wedge is a reversal pattern, and usually it leads to a bearish movement (in about 73% of the cases), so we will expect price to break downwards and begin a downwards movement.

Price may hit the resistance level of 53.00 before beginning the reversal and starting to move downwards, breaking the support trend line and reaching 47.00, and possibly even lower.

Have a profitable trading week!

Steve


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