Symmetrical Triangle on BHI

Looks like a close fight between the bulls and the bears for BHI as it formed a Symmetrical Triangle. Price movement showed some lower highs and higher lows since late November 2013.

As what babypips.com says: Generally a Symmetrical Triangle results when there is an area of indecision within the marketplace where buyers are attempting to push prices higher but are met with resistance by sellers, the market reaches a pause as the direction of prices is questioned, typically because the forces of both sellers and buyers are equal.

A series of rallies and sell-offs continues, each one smaller than the last and the triangle gradually eases upward. Eventually the area of indecision is resolved and the formation explodes, usually with an increase in volume.

But where? The future direction of the breakout can only be determined after the break has occurred. Sounds obvious enough, but attempting to guess the direction of the breakout can be dangerous. Even though a continuation pattern is supposed to breakout in the direction of the long-term trend, this is not always the case.

For me I would wait for a clear breakout before entering.

Caveat!

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felix

A computer engineer by profession and loves to develop online systems/websites. A self-taught stock trader who loves to share his knowledge and enjoys learning, expanding knowledge and staying well-informed. Most often he uses candlesticks, Fibonacci Retracement levels, Ichimoku system on his technical analysis but loves to hear some rumors as well.

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