A big element of trading the technicals effectively is having the ability to identify patterns which are under construction. Taking note of stocks which are in the development stage of their patterns helps not only in recognizing key levels to keep an eye on, but also in monitoring the price action before the stock comes to a decision point.
One stock on my radar right now is Dick’s Sporting Goods – DKS, which has been in a longer-term uptrend for a little more than a year. In recent months, however, the stock has put in some healthy rest which has formed a large ascending triangle pattern.
The chart shows well-defined overhead resistance, as well as a pair of uptrend lines from June and July. A push higher out of this pattern sets this stock free to begin building another leg higher.
Here’s a closer look at the chart of DKS for you:
