CTIC had a nice confirmed breakout move with confirmed volume and sign of strength above the down trend resistance lines of its larger triangle formation today. This is part 3b in a multipart series on CTIC. I first started tracking CTIC when it was compressing into the apex of this triangle on August 15th, 2009.
So far all systems are go on CTIC in my opinion. The bombshell volume today and wide price spread is exactly what we wanted to see as confirmation of the beginnings of a breakout. The price of CTIC did retrench at the end of the day but it still achieved a somewhat better than mid range close for the day. Not bad at all.
It appears that the price is starting to move in anticipation of that so called forward looking news event that may or may not occur on August 24th which is upcoming Monday.
I am thinking right now that tomorrow, Thursday we could see a pullback back to trendline support and to fill in the chart a little bit. If we do pullback tomorrow I really would prefer to see us close above 1.61 or higher and then on Friday I would prefer to see us close above 1.65 or higher. If we fail to accomplish higher than these specific values over the next two days then I am going to become concerned that CTIC may turn into a failed setup.
Triangles that extend way out into the apex like CTIC did can be risky because in some cases they tend to lose the real built up energy that has been stored since the pattern began.
So again for tomorrow I am thinking that CTIC needs to hold a close of 1.60 or higher in order for me to stay bullish on CTIC. If it closes at anything below 1.60 tomorrow then it will in my opinion be a failed setup and at risk of further breakdown.
Assuming both tomorrow and Friday still keep a green light signal on CTIC then I think an ideal target is the 2.23 level which would be about 31% gain from the 1.70 start price.
If CTIC does continue to prove itself the next 3 days and for some reason is able to get above 2.23, it would be an immediate sell at that point in my opinion.
The pattern of CTIC is to get an upward run and spike for a maximum of about 3 trading days. After that it tends to go sideways in long consolidations and break downs, and who on earth would want to sit around and worry about that ???
Part 4 of the CTIC setup will be written up sometime tomorrow.