Happy Monday, traders.
Flicking through some charts over the weekend and I came across this beauty for the Dow Jones, or DJ30. As you can see we have two diagonal trendlines that have been tested multiple times and we’re getting toward the apex of our symmetrical triangle.
Our horizontal red lines indicate potential upside resistance that’s been tested on multiple occasions, however what’s interesting is there are very few tested support levels on the downside.
Now, symmetrical triangles are a neutral pattern, so there’s no real bias to either the up or downside so this could go either way, but as we all saw in early February, price has the potential for an explosive drop if we break to the downside.
This trade has the potential for huge volatility so risk should be managed with the utmost caution, regardless of which way it breaks.
It’s almost time to grab the popcorn and watch this action unfold.
Stay safe traders and watch your risk so your account can live to trade another day.
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Source: Vantage FX Blog