XJO - S&P ASX 200
XJO sitting right on its current trend line.
CMR - Compass Resources
Second pullback for CMR after breaking out. Optimal entry would have been the first pullback after breaking the 100MA.
AGO - Atlass Iron
After a sharp stron volume rally, prices have pull back on weaker volume. Looks to be forming a bullish pennant.
The ascending triangle pattern was broken today with a low of $5.35 reached.
This swing low was equal to the last swing braking the ascending trend line.
It is still interesting to se ehow this plays out.
Compass Resources (CMR) is a favourite company of mine. I've been trading this for a while now and have been in and out a few times. Huntleys newsletters have been talking CMR up a lot lately, and investors are antcipating news of recent drill results and hopefully further confirmation of uranium supplies.
The current chart development is very encouraging forming an ascending triangle.
The citeria set out for a ascending triangle are as follows
The stock should be in an established up trend. 'YES'
At least 2 reaction highs should form the top horizontal line. 'NOT YET'
At least 2 lower reaction lows should form the ascending trendline. 'YES'
Volume usually contracts. 'YES'
As you can see from the checklist above we are waiting for a second test of the ascending trend line. This is an important phase to complete before hopefully confirming an ascending triangle.
Once the horizontal trend line is broken, this line then becomes support.
A good entry point for CMR after confirming the ascending trend line would be a close above the horizontal trend line ($5.74). We would then have a stop loss established as our ascending trendline. Aggressive traders might enter after the second confirmation of the ascending trendline, and this is the re-entry I will be looking at.
Once the breakout has occurred, the price projection is found by measuring the widest distance of the pattern and applying it to the resistance breakout ($5.74-$5.14 = $0.60, target $5.74 + $0.60 = 6.34).
I will follow the progress next week, happy trading.
Disclaimer: No trade setup is 100%, and above is my views of the current setup.
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