Technical Analysis is a Lot Like Fluid Dynamics – Starring Salesforce.com

• Posted by Greg Harmon
• on February 5th, 2014

Stock trading can be a lot like fluid dynamics. But fluid dynamics is easier. Take for example when you squeeze water through a nozzle at high pressure it can go supersonic as it explodes out the end. that calm stream now has a lot of power to move. The Ascending Triangle in Technical Analysis is a lot like that for traders. The pressure builds against the tightening price range until it releases. There is one in Salesforce.com, $CRM, right now. The chart below shows the resistance at the top at 61.60 being tested as the support trendline rises from December. A break of that resistance carries a target of 66.20 higher, kind of like how far the water comes out of the nozzle. The other technical indicators give you an idea that a break higher could happen. The RSI is rising and bullish and the MACD is about to cross up. These support a move higher in the stock price. Are you ready for the explosion?

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