Welcome to Bravechart. Your in-depth article on chart analysis from a Scotsman stationed in the Outback.
Channel Pattern on Brambles Limited (BXB)
As traders, we use technical analysis as a reliable method for speculating on future price direction of both equities (shares) and indexes. Technical Analysis in simple terms is the study of historic price movements in a chart in search of patterns or consistently traded support and resistance levels. Today we are looking at a specific chart pattern that falls under continuation patterns, the Channel.
Appearance: An Ascending Triangle pattern comprises of:
- An up-trending stock that has higher peaks and troughs.
- A resistance level where the stock is channelling towards.
- Both trend lines create a triangle forming in the top right of your chart.
Important Note: Be aware, this pattern will not be confirmed until the share price breaks through the resistance level and continues the uptrend.
Example: Aurizon Holdings Ltd (AZJ)
AZJ has been in a medium to long term uptrend for the last seven months, with the stock recently finding it hard to break through resistance just above $4.70. With the share price reversing from the resistance, the stock has consistently tested the uptrend line – acting as support – and continued to uptrend. The share price has now bounced off this support line recently and is getting close to the resistance level once again. As the share price is being pushed higher and tighter together, we will likely see a break out of the share price soon and then a probable continuation of the breakout for the next couple of days.
There are many ways that you could take advantage of these patterns. As a specialist in derivatives, we are able to profit on a stock when it falls as well as when it rises.
If you would like to learn how to pick a stocks direction, then Join us at our live face to face one day “Technical Analysis, Picking the Direction of a Stock” course. Click here to find out more.
Contact us today on 03 8080 5788.
Your Friendly Kilted Advisor,