IMO, its an ascending triangle with the resistance at...

IMO, its an ascending triangle with the resistance at 15c.

http://bigcharts.marketwatch.com/interchart/interchart.asp?symb=au%3Agse&time=&freq=


Using Elders method, lines through the congested price areas, we can make an upper line (horizontal) at 15c, and an ascending line from the higher lows achieved on 26, 27 March, 4 & 5 April.

We then come to today. We can see that now, in the last third of the triangle, we have had a breakout to the upside. The resistance at 15c is strong and todays news, whilst it had a trading halt for dramatic effect, was simply not enough to sustain the breakout. When the breakout failed, the price action did what price action does on breakout failure, swings back through downward support. This too was rejected by the market, and the price has closed at 14c, the point supported by the ascending line in our triangle. In a minute I will learn how to post pictures and show you what I mean.

Ascending triangles are more likely to have upside than downside breakouts, but we are going to need some new blood in the stock to sustain a breakout. On the upside, despite the black candle, we actually saw some divergence in the DMIs today (bottom part of the graph), so the overall upward trend acutally gained some strength on the back of today's buying (in numerical terms, there was more up buying than down buying).

So, we are going to either accumulate more buyers until the resistance at 15c is broken, or buyers are going to get discouraged and the share price will drift off. ADX analysis suggests that buyers and holders still have the upper hand and are slowly strengthening their grip.

For risk management purposes, you would want to set your stop loss below support points. Depending on your trading style, a trailing stop loss would be at 12c, just below the 4 April Doji low, or absolute stop loss of 10.5c, below Director buying level.

Hope this helps.