EGO Eldorado Gold Daily Chart Sideways Symmetrical Triangle

EGO is moving sideways the last three months thru a triangle. The 200 MA is flat lining serving as important support and resistance. Price and the MA's are all squeezing into the triangle verifying this sideways action. Price will make a major decision breaking thru either the top rail or bottom rail in the days ahead. The bears are at an advantage since the red rising wedge, overbot conditions and negative divergence spanked price down in early September marking a significant top. The money flow move over the last couple months is also negative; the red circle will try to pull price lower. In addition, in lieu of the sideways triangle shown, picture a descending triangle, leaving the top rail in place but instead using a horizontal line across 16.5 as a baseline. Descending triangles are bearish patterns and a loss of the 16.5 level will result in serious selling.

Projection is for price to drop out the bottom of the triangle, and fail the 16.5 level and ultimately target 11-12 in the weeks and months ahead. If price exits the top side moving towards 19-20, negative divergence should form, thus, remain cautious if bullish since the move out the top may be a fake-out move should it occur. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here or any links connected to this information. Consult your financial advisor before making any investment decision.

Note Added 12/2/11 at 5:55 PM:  Price dropped today to close at 17.43 now sitting in the center of the sideways triangle. EGO faces a big decision next week and will move out of the triangle, breaking out one way or the other.