Put simply, an ascending triangle pattern is a setup that's identified by a horizontal resistance level to the upside and uptrending support below. As shares bounce in between those two technically significant price levels, they're getting squeezed closer and closer to a breakout above resistance (in this case at $90). When the breakout happens, we have a signal that the glut of supply that's cause $90 to act as a barrier has been completely absorbed by buyers. That's when we want to buy too.
I like the fact that PRA has hit its head so perfectly on $90 resistance the last seven times it's attempted to move through that level. A strong resistance level like that means that shares will have a much more snappy move once the oversupply of shares above $90 gets taken out.To see this week's trades in action, check out the High Volume Technicals portfolio on Stockpickr. -- Written by Jonas Elmerraji in Baltimore.
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