Another stock I mentioned last Friday as trying to breakout is taking a serious kick at the resistence pop can this afternoon. Is it a breakout? What will the close be .. I'll post a chart sometime after it closes..
TMM pennant so far
1 Pennant-like pattern so far on TMM (Timmins Gold, producer, Mexico) .. 3 weeks in duration, 2 signature declining volume. Support and resistance in this pattern coming to a point rather quickly. Pennants are continuation patterns of a prior trend. Prior trend here is obvious .. If the prior trend is up, the pennant is a bullish pattern, if the prior trend is down, the pennant is a bearish pattern.
If bullish, you look at the resistance line and wait for a break above (increase in volume too) .. this signals a resumption of trend.
Of course in the gold market, Bernanke might stroke his beard and traders react by selling gold and everything goes head over heels in a hurry, but as of now, we have a promising development in the TMM chart.
Essentially a pennant with declining volume indicates a tipping point is being reached: the price of the sellers and buyers are willing to place orders is closing in on each other, and everyone else is waiting for someone to blink.
Anytime support meets resistance, one of lines has to be broken by the price--it's a matter of geometry--the sides of the triangle reach a point in front of the timeline and will be crossed either up or down by the price as time moves along. Once that happens, we have a break, either bullish or bearish. It's inevitable.
On the other if the pennant is compromised in any way (ie, support breached), all bets are off..
What about the ovals at 3 .. well. .. lower highs again, but what developed ultimately were not higher lows (support was not rising), and thus the dreaded double-top (the M -shape), lethal at the top of uptrends as they signal a reverse of trend, and the reverse of up is down! Essentially what happens in the double top is the stock rallies twice and stalls at the same place, the stock then declines back to the valley between the 2 rallies and combination of these events brings frowns to many once smiling faces.
Why are they called Timmins if they are in Mexico? Good question! The CEO likes Timmins, or is from there or something. Says he won't change the name. And so it stands. It's a quirk of the owner and perhaps he considers it good luck.