Descending triangle nearing positive breakout confirmation

19 Jan 2014

Although this pattern is a bearish formation, a clean break of the previous apex or the slope would be a confirmation of a bullish breakout, testing previous highs during the triangles creation. The volume of the rise is low compared to the recent test of the bottom of the triangle at D, but has weakened the upper boundary of the formation significantly. Should the price breach the upper boundary or fail to descend before approx 01/25, the prior peaks should serve as resistance points. However, if the formation breaks through the lower boundary we should see a quick drop to 700, with resistance as low as 570 should that fail to hold.