Small-cap gold and silver company Comstock Mining ( LODE) is forming a similar setup right now, albeit without starting off with a downtrend first. Comstock has been rallying hard since June, jumping more than 64% since the start of the summer. Despite the moves that LODE has already made, the triangle setup points to more upside. >>5 Oversold Stocks Ready to Bounce Like PKX, Comstock is forming an ascending triangle. The most notable difference is the fact that this pattern is coming in at the top of a rally rather than after slipping lower (LODE's is a more textbook example of an ascending triangle). For this stock, the resistance level to watch is $3.20 and uptrending support has moved more or less in line with the 50-day moving average. Traders should take Monday's breakout through $3.20 as a buy signal. When looking at technical setups, I think it's useful to think of them in real terms. For a triangle like LODE, the setup is being made by a glut of supply of shares above $3.20 (our resistance level) and increasing demand below to create the uptrend. Monday's move higher means that all of the excess supply has been absorbed by increasingly eager buyers. With that "ceiling" removed, traders who are willing to take on the added volatility of a true junior miner have a strong signal to go long.