aceofswords
Short

3 Bearish Pennants On 5 Min Gold Chart

FX:XAUUSD   Gold Spot / U.S. Dollar
223 2 6
Please see Details On Chart
For the pennant to complete it must have 3 top and 3 bottom touches of the formation. Which ever way the fourth touch goes is the direction and usually abides by the the previous trend. To complete pennant 3 we therefore still need one touch down and one touch up after that. Where-as your arrows would suggest only one more leg up to 1208. before the next breakout to the downside?

I would also only consider a predictable drop the length of the back of the pennant. So we are talking about a predictable $6-8 downside from the point of exit from the pennant. Which could be as little as your 1. (1199.70).

Just my thoughts. Good luck!
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Hi David, thanks for your input.....
Personally I don't find many patterns that follow the script as perfectly as you describe, if they did, we would be millionaires in no time at all. I prefer to wait for a retracement based on fib levels, which are also never a guarantee, but just my personal preference. ;0)
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