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by Arthur Hill
After a big run in 2004, Mitsubishi Tokyo Financial consolidated for several months and looks poised to continue higher.
Position: Accumulate
Arthur Hill
Arthur Hill is currently editor of TDTrader.com, a website specializing in trading strategies, sector/industry specific breadth stats and overall technical analysis. He passed the Society of Technical Analysts (STA London) diploma exam with distinction is a Certified Financial Technician (CFTe). Prior to TD Trader, he was the Chief Technical Analyst for Stockcharts.com and the main contributor to the ChartSchool.
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ASCENDING TRIANGLES
Mitsubishi Tokyo Financial Forms Bullish Continuation Pattern
03/11/05 09:08:22 AMby Arthur Hill
After a big run in 2004, Mitsubishi Tokyo Financial consolidated for several months and looks poised to continue higher.
Position: Accumulate
| The current pattern at work for Mitsubishi Tokyo Financial (MTF) is an ascending triangle. These are bullish continuation patterns that occur after an advance and foreshadow a continuation of that advance. As with most patterns, some sort of confirmation is required, and this comes in the form of a resistance breakout. |
| The pattern reflects both increasing demand and overhead supply. The green arrows show a series of higher lows. These higher lows formed because buyers came in at higher prices and prevented prices from moving below the prior low. This shows increasing demand. |
|
| Figure 1: Mitsubishi Tokyo Financial. The pattern reflects both increasing demand and overhead supply. The green arrows show a series of higher lows. Even though demand is increasing, there is overhead supply around 10.5 (red arrows). |
| Graphic provided by: MetaStock. |
| Graphic provided by: Reuters Data. |
| |
| Resistance marks overhead supply. Even though demand is increasing, there is overhead supply around 10.5 (red arrows). The stock tried to punch through this resistance level and failed each time. A move through 10.5 would signal a victory over supply and argue for further strength. |
| The upside target would be to around 14. The length of the pattern is added to the breakout for a projection (~10.5 - ~7 = 3.5, 10.5 + 3.5 = 14). The stock is currently trading near support and needs to hold the lower trendline to keep the pattern alive. A move below this trendline and the December low would negate the pattern and the bullish forecast. |
Arthur Hill is currently editor of TDTrader.com, a website specializing in trading strategies, sector/industry specific breadth stats and overall technical analysis. He passed the Society of Technical Analysts (STA London) diploma exam with distinction is a Certified Financial Technician (CFTe). Prior to TD Trader, he was the Chief Technical Analyst for Stockcharts.com and the main contributor to the ChartSchool.
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