Contracts for Difference

A symetrical triangle is a resting phase for a stock (or commodity), trend lines can be drawn across the lows and highs of the resting phase, this should show the price converging down to a point (like a pennant flag). A breakout should occur somewhere between 50-75% into the triangle pattern. An early or late breakout is more prone to failure, and therefore a less reliable breakout. Price may find the apex to be support or resistance following a breakout, so a successful test of the triangle adds reliability to this pattern.

The following chart shows the price of Gold is currently in a symetrical triangle trading range (however it is probably a bit past the 75% mark.

It’s currently testing the bottom support line, the break out commonly forms in the direction of the prevailing trend which is upwards. This should bounce off the current support line and continue it’s upward trend breaking out soon.