The daily time frame broke out of a symmetrical triangle with decent volume after consolidating a strong sell-off. The weekly showed that regardless of the strong momentum behind the September selling, price consolidated constructively above a previous swing low (above $3.0).
This symmetrical triangle breakout gives a measured move which coincides with a 50% Fib. projection off of the seed wave which has formed since the October lows.
Look at the monthly chart and we get even further warning that price could rally hard from this point. After all, price broke down from a trend line that was in place since the January '09 lows and a throw-back to this trend line wouldn't be out of the question.
So, say we rally to our symmetrical triangle measured move (50% projection) but then fizzle out. This could then set up a pretty blatant Head & Shoulders pattern (neckline at the $3.00 mark).
Essentially, a rally looks to be in the works, but it would be prudent to stick with fixed targets (namely that $4.14 measured move price point) as there is obvious overhead resistance to overcome. Also worth remembering, should the breakout fail then longs will be trapped, creating a strong move in the opposite direction.
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