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You may notice a rather large triangle starting in late October 2009. It looks fairly solid, three touches on the bottom and three on top, not counting the recent break of course. The really nice thing about this triangle is the almost vertical start and the massive height. Price targets for triangles can be obtained by taking the height and adding it to the current top. This gives us 32.00, subtract a bit for safety and you get a range from 29.00-30.00. Not too bad. Things to watch for are limited; this is a nice, simple trade. All that really matters is the interaction of the price with the top of the triangle. For a time range on the price target I like to take half the length on the triangle, that gives us about 2 years. I think the bulk of the move up will probably happen this year however. There may be some resistance near the 20.00 mark and maybe some at the 24.00 mark as well. Time will tell on those. Here are some hypothetical trading points.
Entry: Now (18.31)
TP: 19.20, 23.50, 29.00, 30.00 (Lots of leeway here, if the price snags on the way up selling would be the safest course of action, maybe sell half at 19.20 and the rest at a higher price if possible.)
SL: 17.00, 15.50, 12.50 (Harder to give a good range here, the price shouldn't break under the top of the triangle but it is possible. 15.50 and 12.50 mark points where the triangle would appear to have failed.)
Triangles don't work all the time; just like any other chart pattern. This trade will need to be monitored closely because I see a potential for it to snag on the way up. If it begins to fall while it's near the mentioned points selling would be the best thing to do.
If you have a stock you want analyzed leave it in the comments.
Do your own research before taking any position. I do not currently own any REV and do not plan on buying any within the next 72 hours.
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