Gold Symmetrical Triangle Pattern Formation

Gold Buy @ 1279 Stop @ 1230 TGT 1350 – 1425 - 1527

Gold is showing sign of Symmetrical Triangle Pattern Formation where its near the lower support level at point ‘e’ around the level of 1273$ and once this support of 1270 – 1273$ holds reversal is expected in gold where on higher side falling trend line resistance is seen at 1320 and 1350 where as crossover above the same will confirm the breakout of the pattern. If we take breakout at 1320$, Expected target as the height of the triangle comes to 1527$ on higher side. We expect small profit booking on the way to test the target of 1527$. 

Generally, a triangle pattern is considered to be a continuation or consolidation pattern. Sometimes, however, the formation marks a reversal of a trend.

Symmetrical triangles are generally considered neutral, ascending triangles are bullish, and descending triangles are bearish. From a time perspective, triangles are usually considered to be intermediate patterns. Usually, it takes longer than a month to form a triangle. Seldom will a triangle last longer than three months. If a triangle pattern does take longer than three months to complete, Murphy advises that the formation will take on major trend significance.

A symmetrical triangle pattern is relatively easy to identify. In addition, triangle patterns can be quite reliable to trade with very low failure rates. There is a caution concerning trading these patterns, however. As mentioned previously, a triangle pattern can be either continuation or reversal patterns. Typically, they are continuation patterns. To achieve the reliability for which the triangle is well known, technical analysts advise waiting for a clear breakout of one of the trendline defining the triangle. Volume is an important factor to consider when determining whether a formation is a true triangle. Typically, volume follows a reliable pattern: volume should diminish as the price swings back and forth between an increasingly narrow range of highs and lows. However, when breakout occurs, there should be a noticeable increase in volume. If this volume picture is not clear, investors should be cautious whether pattern is a true triangle.