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Thursday, July 14, 2011

Golden Agri - Symmetrical Triangle

I visited a blog which shows a chart depicting Golden Agri breakout from a symmetrical triangle. At the first glance, I was excited and agreed with the suggestion. However, when I open up my own chart and take a closer look. I realized the so called symmetrical triangle only has two-touch on the upper trendline ( see below ):

I feel a more valid way to trace the symmetrical triangle is to have three-touch on both the upper and lower trendline as shown below. Based on my tracing, there is no breakout yet. As a matter of fact, I am not certain if the breakout (when it occurs) will be from the upside or downside! Symmetrical triangles are usually continuation pattern. The prior trend was a downtrend. The upside volume appears to be lighter than the downside volume. Instead of calling for a buy too soon, I would prefer to wait for the actual breakout to occur.