Working Money magazine.  The investors' magazine.
Traders.com Advantage

INDICATORS LIST


LIST OF TOPICS





Article Archive | Search | Subscribe/Renew | Login | Free Trial | Forgot ID?


PRINT THIS ARTICLE

ASCENDING TRIANGLES


Owens Corning Attempts Breakout

08/23/05 07:57:14 AM
by Gary Grosschadl

The highest close since last April draws attention to this stock, especially when breaking out of a pattern.

Security:   OWENQ
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.

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.



Gary Grosschadl

Independent Canadian equities trader and technical analyst based in Peterborough
Ontario, Canada.

Website: www.whatsonsale.ca/financial.html
E-mail address: gwg7@sympatico.ca

Click here for more information about our publications!


Comments or Questions? Article Usefulness
5 (most useful)
4
3
2
1 (least useful)

Comments

Date: 08/23/05Rank: 5Comment: 
PRINT THIS ARTICLE





S&C Subscription/Renewal




Request Information From Our Sponsors 

DEPARTMENTS: Advertising | Editorial | Circulation | Contact Us | BY PHONE: (206) 938-0570

PTSK — The Professional Traders' Starter Kit
Home — S&C Magazine | Working Money Magazine | Traders.com Advantage | Online Store | Traders’ Resource
Add a Product to Traders’ Resource | Message Boards | Subscribe/Renew | Free Trial Issue | Article Code | Search

Copyright © 1982–2019 Technical Analysis, Inc. All rights reserved. Read our disclaimer & privacy statement.