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by Gary Grosschadl
The highest close since last April draws attention to this stock, especially when breaking out of a pattern.
Position: Buy
Gary Grosschadl
Independent Canadian equities trader and technical analyst based in Peterborough
Ontario, Canada.
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ASCENDING TRIANGLES
Owens Corning Attempts Breakout
08/23/05 07:57:14 AMby Gary Grosschadl
The highest close since last April draws attention to this stock, especially when breaking out of a pattern.
Position: Buy
| Owens Corning invented glass fiber, and glass fiber insulation, more than 50 years ago. Well known for its line of pink insulation products, it has become a leading home building products company. |
| This stock exploded past its $1 barrier last year and ran for four consecutive weeks hitting the $5 mark. Since then, it has formed a large ascending triangle, which is often a bullish continuation pattern. |
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| Figure 1: A bold move for OWENQ. |
| Graphic provided by: StockCharts.com. |
| |
| The volume character is conducive to what should happen for this triangle formation -- volume declines throughout the pattern and then expands during the breakout move. Several indicators also reflect the bullish promise. The directional movement indicator at the top of Figure 1 shows an almost ideal situation with a strong and rising average directional movement index (ADX) (ideally above 25) and +DI above -DI (positive and negative directional movement). The lower indicators also show their bullishness as indicated by the MACD (moving average convergence/divergence) and the RSI (relative strength index). |
| The bold target for this formation is $9, which is equal to the widest part of the formation as applied to the breakout level. Often, this breakout level can be tested again, giving hopeful bulls another chance at some point down the road. |
Independent Canadian equities trader and technical analyst based in Peterborough
Ontario, Canada.
| Website: | www.whatsonsale.ca/financial.html |
| E-mail address: | gwg7@sympatico.ca |
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Date: 08/23/05Rank: 5Comment:
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