A triangle is a consolidation pattern that denotes a pause in the current trend. A triangle is represented by two converging trend lines within a narrow price range, resembling a triangular shape. After price moves out of the triangle (breakout/breakdown), and price resumes the previous trend prior to the pause, the triangle is then categorized as a continuation pattern. However, a breakout and hold above the triangle top (bullish), or a breakdown and hold below the triangle bottom (bearish), requires volume confirmation. Regardless of the consolidation pattern from which they emerge (triangles, rectangles, flags, pennants, etc.), increased volume activity is necessary to validate any breakout or breakdown.
The market has been range bound for the last few weeks with volatility on the decline, and earnings all over the place. So where to go to look for a trade? Nike has already had Earnings and is near a low of the year, so seems like a good option. As a contrarian that can mean only one thing to me: I have to make a trade with the assumption it will go up from here over the next 45ish days. We will do that by making a Long Call Vertical trade to bet that it starts to head up over the next couple months. For more on my trading and how to join me in real time, see below. Watch the video to get the details. Kal Trading Risk Disclaimer All the information shared in this video is provided for educational purposes only. Any trades placed upon reliance of SharperTrades.com are taken at your own risk for your own account. Past performance is no guarantee. While there is great potential for reward trading stocks, commodities, options and forex, there is also substantial risk of loss. All tr