Welcome to Extreme Investor Network, where we provide unique insights and analysis on the stock market, trading, and all things Wall Street. Today, we are discussing the resistance seen at the bottom of a triangle formation in the market.
Recently, there was resistance observed around the rising trendline at the bottom of a large symmetrical triangle pattern. This indicates a potential counter-trend rally following a breakdown from the triangle formation a few weeks ago. The 20-Day MA was recaptured three days ago, signaling short-term strength in the market. Today’s trading range is also fully above the 20-Day line, further supporting the possibility of higher prices.
The next key price level to watch is the 61.8% retracement at 73.74, followed by potential resistance around the falling 50-Day MA at 74.94. It is important to note that the 50-Day line has converged with the internal downtrend line, pointing to similar resistance levels.
While short-term strength is apparent, an eventual turndown is anticipated due to the bearish breakdown of the triangle pattern. Crude oil is expected to find resistance and potentially turn back down to retest recent lows. Keep an eye on the long-term downtrend line as potential support, which may be approached if a bearish reversal occurs.
However, a rally above the 50-Day MA would counter the bearish implications from the symmetrical triangle breakdown. The monthly chart also provides clues, with a potentially bullish hammer candlestick pattern forming. Holding above the 50-Day line puts the monthly high in range, suggesting a possible shift in the market sentiment.
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