Sunday, September 5, 2010

9/5/10 - DIAMOND BOTTOM?



I couldn't help but look at a chart tonight. The one in particular that caught my attention was my long term channel chart above.

What I noticed was the intersection of the yellow and red channels particularly where the market has been stuck in a range the past few months. I removed the 25 and 75% channels. As you may notice below, the intersecting channels traced out a pretty decent looking diamond pattern.



So we may be at a cross roads here in terms of a breakout of this pattern. The target for this pattern is approximately 1250. Don't forget about the inverted head and shoulders pattern as well.

Regarding the chart above, the pattern alone just speaks of a possible continuation pattern (possibly a pennant?). Ignore the count since it doesn't look quite right (particularly wave 3) but the wedging pattern somehow makes me believe it wants to break to the upside.
blog comments powered by Disqus