Australian iron ore producer, Atlas looks poised for an upside break from a large symmetrical triangle pattern.
The weekly chart below provides a long term perspective, showing that Atlas has been in a well established, impulsive uptrend. The stochastic oscillator is also currently trending up. So all in all the longer term chart appears to support the possibility of the current triangle being a bit of a pause in a long term trend that may continue if there is a break through the top of the triangle in the near future.
The daily chart below shows a closer view of the triangle formation. Many traders require price to break out of a triangle within about 75% of the distance from the base to the apex. Applying this rule, the break out probably needs to occur on the current rally and within the next few candles for a valid set up.
A common strategy with triangles is to set a profit objective which projects the height of the triangle from the point at which price breaks through the triangle resistance. Using this strategy the profit target is likely to be a bit below the resistance at the all time high around 4.37. This peak is shown on the left hand side of the weekly chart. This seems a neat fit in that you would not be counting on a break past this resistance into new highs with this set up.
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