A similar setup is forming in Unilever (UL) right now. Like BHP, Unilever is forming an ascending triangle, in this case with resistance at $33.50.
Unlike BHP, the setup in Unilever is effectively a picture-perfect, textbook example of an ascending triangle. That's because the triangle is forming after an uptrend has been established (making it a continuation pattern), momentum is locked in an uptrend, and volume is dropping right now.
That last element may sound like a bizarre thing to look for in a bullish setup. After all, isn't rising volume a good thing for an uptrend? Normally, the answer is yes, but not in an ascending triangle setup. Instead, a gradual decline in volume, followed by a volume spike on a breakout above $33.50 is a positive sign for longs. That spike on the breakout indicates that there's participation in the trade now that buyers have absorbed excess supply above $33.50.Another interesting thing you may notice about UL's chart is the fact that it seems to be filled with gaps. Normally, extremely gappy trading is a bit of a concern - it suggests that a stock is volatile. But in UL's case, those gaps are suspension gaps caused by off-hours trading on the London and Amsterdam exchanges; they're not significant for trading purposes. Follow @stockpickr