A triangle consolidation should be "followed by a breakout."INPEX Daily Chart
The chart is moving around the 200-day moving average (the gentle red line).
When the price is above the 200-day moving average, buying pressure has been dominant.
When the price falls below the 200-day moving average, selling pressure takes over.
The yellow background on the chart indicates a phase of buying dominance, while the blue background signifies a phase of selling dominance.
Recently, the chart has formed a triangle consolidation pattern.
A triangle consolidation is often described with the phrase "follow the breakout."
This pattern forms when a standoff occurs between buyers and sellers, leading to a state of equilibrium.
Once this equilibrium breaks, a new trend emerges.
Thus, the idea is to follow the direction of the trend once it becomes apparent.
While it's unclear which way the breakout will go, the likelihood of an upward breakout increases when the price is above the 200-day EMA. Conversely, when the price is below the 200-day EMA, the chance of a downward breakout increases.
So, instead of trying to predict whether the price will rise or fall, let's trade in line with the movements of the chart.
