Another upside rally attempt on Wednesday was for a second
time this week sold back lower by the session’s close. The spot December 15 contract topped out at a
2.410 high but couldn’t hold into the gains trading lower to a 2.347 daily
close, down .024.
A small triangle is forming on the chart with lower triangle
support at the 2.320-2.330 level. A
breakout under this support would initiate the triangle turning 2.230 into the next downside support followed
by the 2.188 contract low. The downside
measuring objective for the triangle would be for the December contract to
trade down to 2.100 which is also the bottom of an open gap on the daily continuation chart.
The breakout from the triangle could also come to the upside
above upper triangle trend line resistance at 2.380-2.400. If this occurs, 2.650 would be the upside
objective for the triangle.
Triangles have a 75% chance of being a continuation pattern
versus a 25% chance of being a reversal pattern. In this case, the 75% chance favors a
downside breakout from the triangle.
Technical Indicators:
Moving Average Alignment – Bearish
Long
Term Trend Following Index – Bearish
Short Term Trend
Following Index - Bullish
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