As technical analysts  we look at history to show us what has a higher probability of re-occurring in the future.  Previous areas of support/resistance often become future areas of resistance/support.  Also some stocks historically produce certain types of patterns over and over.

CSL  is currently producing a Descending Triangle after coming off the $41.00 weekly resistance line. The base of the triangle is at the same level of previous resistance levels from September 2007 to March 2008. If we look back to May/June of this year, the stock behaved in the same way:  Found resistance at $41, produced a Descending Triangle, then broke down.   If CSL was to break down from the current Descending Triangle it is likely to reach $32.65.

Interestingly, the $32.65 mark is not only a weekly support line, but the neckline of a completed double top (DT) pattern, that was formed by the two (2) descending Triangles and $41 resistance. Long term, if the neckline of this DT was breached, CSL could see levels as low as $25 which is again,  a major weekly support…..coincidence??

(click on images to enlarge)

CSL

CSL

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