The stock price of Paxys, Inc. of the Philippine Stock Exchange is testing the support line (lower red diagonal line) of the symmetrical triangle formation (red diagonal lines).
Symmetrical triangles can either breakout or breakdown, it usually breaks out if it’s coming from an uptrend and breaks down if it’s coming from a downtrend. In the case of Paxys, Inc., we might be seeing a breakdown since the stock price started down-trending when it reached 3.85 pesos per share last August 2009 to the current price of 2.16.
Adding the 125-point drop of the US market during last Friday’s trading session because of the Goldman Sachs fraud case that pulled down the financial sector, I’m more convinced of the symmetrical triangle breaking down.
My Ideal Entry: Upon Breakdown/when the price goes below the support line (lower red diagonal line). Around 2.08
My Ideal Stop Loss: 2.22 pesos
My Ideal Target Price: 1.82 pesos
Reason for Trade: Symmetrical triangle breakdown