Today’s Chart of the Day was shared by David Rath (@DJwrath). The Dow closed flat for the second week in a row. David points out that the price has been tightening into a narrow since the end of November, with rising support and falling resistance. This consolidation is starting to resemble a symmetrical triangle, or coil pattern, as it's also called. Just like a coiled spring, the tighter price action gets, the more potential energy builds for a big pop! Pressure is building for a large move in either direction. Consolidations typically resolve in the direction of the prevailing trend, which in this case is higher, but when they don't it's a major red flag. Keep an eye on which direction the Dow resolves, as we get closer and closer to the apex of the pattern.
Chart of the Day - Friday, February 10th, 2023
February 10, 2023
