$190 billion drug maker Pfizer (PFE) is another name that's forming a triangle pattern, only in PFE's case it's not a bullish one. That's because the pharma giant is forming a descending triangle, the bearish opposite of the setup that's shaping up in Toyota. Here's how to trade it.
The descending triangle in Pfizer is formed by horizontal support at $27 and downtrending resistance to the upside. Basically, a drop below that $27 price floor signals that this stock can't catch a bid, and it's time to sell -- or short -- shares of PFE.Whenever you're looking at any technical price pattern, it's critical to think in terms of buyers and sellers. Triangles, channels, and other price pattern names are a good quick way to explain what's going on in this stock, but they're not the reason it's tradable. Instead, it all comes down to supply and demand for shares. That support line at $27, for example, is a price where there is an excess of demand of shares; in other words, it's a place where buyers had been more eager to jump in and buy at lower price levels than sellers were to sell. That's what makes a move below it so significant -- the breakout tells us that sellers are finally strong enough to absorb all of the excess demand below that price level. Don't hang onto PFE after that happens.
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