On May 21 I wrote about the forming Symmetrical Triangle on the BlackBerry (BBRY) chart and presented two possible scenarios of the future price action.
Since then the price drifted slowly to the lower support line and made an attempt to break through it on Jun 03. Light volume and a lack of follow-through action made this breakout look suspicious. Practitioners of the Elliott Wave analysis could make a case that the final wave e of the triangle is unfolding. It demonstrated a textbook false breakdown through the triangle boundary but didn’t go lower than wave c.
I am not going to claim that the decline from May is the final wave of the triangle. An attempt to label waves inside a triangle is, very often, an exercise in futility. When you think that you have counted five waves, a triangle finds a way to subdivide further. However, establishing a position near the triangle boundaries provides a low risk entry. So, I have watched patiently for the price action near the support line.
Note that there is no a breakdown on the medium horizon P&F chart with the 0.4 volatility adjusted box size. When BBRY opened with a gap up today and began to rise instead closing the gap, those who opened new short positions on the false breakdown apparently realized that they are trapped. It seems that the short covering added fuel to the morning rally and it became clear that the lower boundary of the triangle holds for now.
A Low Pole reversal pattern (lime box) on the short horizon 0.2x3 P&F chart was a signal to me to go long.
Bought to open BBRY Dec13 16 Call 10 contracts at $1.57
Disclaimer: I express only my personal opinion on the market and do not provide any trading or financial advice (see Disclaimer on my site).