Meanwhile, Berkshire Hathaway ( BRK.B) is forming the exact opposite setup right now -- and as you might guess, that's sending traders a bearish signal for the fourth quarter. Berkshire's price pattern is called a descending triangle; it's formed by downtrending resistance above shares and horizontal support to the downside at the $111 level. In this case, Berkshire is getting squeezed closer towards a breakdown below its price floor at $111.
It makes sense to sell (or short) shares on a move through that key support level.Whenever you're looking at any technical price pattern, it's critical to think in terms of buyers and sellers. Triangles, and other pattern names are a good quick way to explain what's going on in a stock, but they're not the reason it's tradable. Instead, it all comes down to supply and demand for shares. That support level at $111 is a price where there had been an excess of demand of shares; in other words, it's a place where buyers have been more eager to step in and buy shares at a lower price than sellers are to sell. That's what makes a breakdown below $111 so significant -- the move would indicate that sellers are finally strong enough to absorb all of the excess demand above that price level. That's why it makes sense to wait for that trigger before you sell.