Good day traders,
Today, I have a chart of a symmetrical triangle in Wing Tai’s chart for review. This triangle formed quite some time back, during the year 2010 where property counters were rangebound. Wing Tai consolidated into a symmetrical triangle. I discussed the triangle during those days – http://technicalanalysistalk.wordpress.com/2010/11/22/wingtai-analysis/ . So what happened was, I was bullish on Wing Tai, seeing an upward breakout that came with a smaller bull flag formation. Again, you can see that in the link included. And, I must admit I took the trade. Of course, as you can see Wing Tai’s chart, I lost money on it. Anyways, let us look at the chart again while we have hindsight to work for us.
Looking back, you can ether take the breakout to the upside as a failed one, and price reversal downwards would mean this is a busted symmetrical triangle. Or, you can also not treat the breakout as one and simply adjust your trendlines. What that would have meant is that Wing Tai’s symmetrical triangle came with a downward breakout. No failed upward breakout at all. However, I saw it as an upward breakout, so I will classify this as a busted symmetrical triangle. Projection is simple: we take the height of the triangle and project it downwards where the apex of the triangle is. That gives us the $1.30 region, which Wing Tai managed to hit in August of 2011.
One lesson I took from this bad trade was to be careful of pattern breakouts. Is volume supporting the breakout? Any resistance overhead that breakout did not clear?
All analyses, recommendations, discussions and other information herein are published for general information. Readers should not rely solely on the information published on this blog and should seek independent financial advice prior to making any investment decision. The publisher accepts no liability for any loss whatsoever arising from any use of the information published herein.
