HSBC Holdings

We're seeing the exact same price setup in shares of $200 billion banking giant HSBC Holdings ( HSBC) -- just in the longer-term. For HSBC, resistance comes in the form of a range from $56 to $57. More risk-averse traders should hold out for the higher level to get busted before taking on this trade.

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Whenever you're looking at any technical price pattern, it's critical to think in terms of those 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 $57 resistance level is a price where there has been an excess of supply of shares; in other words, it's a place where sellers have been more eager to step in and take gains than buyers have been to buy. That's what makes a breakout above it so significant -- the move means that buyers are finally strong enough to absorb all of the excess supply above that price level.

Since HSBC is a longer-term pattern, the 200-day moving average is the spot to keep a stop loss after buying. It's been a pretty good proxy for support on the way up.

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