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Air China (0753) triangle strategy

CMC Markets

I posted a potential triangle set up in this stock on 7 December

Price broke below the triangle support yesterday so I've noted a strategy on the chart below for readers following the trade

The break out of the triangle was a "wide range break" ( i.e. it happened with a very large candle that started from close to the triangle support).

Wide range breaks do a good job of predicting larger, stronger trends emerging from a ranging pattern like triangles. This justifies a more agressive stategy than normal. The profit target here uses 161.8% of the triangle height, deducted from the break point. This coincides with a 61.8% retracement of the last major up swing. The stop has been placed just behind the wide range candle

You can follow Dave and I on Twitter at DaveCharts and RicCharts

Cheers

Ric


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