PATTERN FORMATION: A symmetrical triangle is a consolidation pattern whereby trading activity is constrained between the two converging trendlines. A breakout in either direction could occur once the pattern has matured or at the apex (where the two converging lines meet).
POSSIBLE OUTCOME: Capital Property Fund (CPL) is currently trading within a symmetrical triangle, and this consolidation may persist until a breakout in either direction occurs. The upper slope of this pattern may arrest near-term upside. But if the weekly RSI remains bullish, a positive breakout above 1150cps should follow. We would expect the upside target of this pattern, situated at 1395cps, to be fulfilled in the short term (1-3 months) upon a positive breakout. Breaching the 1200cps prior high would place CPL closer to that targeted level.
RECOMMENDATION: Go long at a close above 1150cps, with an 8% stop loss from the entry price. However, investors must ensure that the daily RSI is not overbought at this level. If it is, we suggest investors wait until the same level is breached again.
A FAILED PATTERN: A move through the 1000cps support level would mean CPL has breached the lower slope of the pattern instead, thereby confirming a negative breakout. The downside target in this instance would be at 705cps.