December 17, 2008

Flag Formation

By Planet Wealth

In a recent entry I spoke about a small flag formation on BHP. STO has potentially formed a large flag version that is waiting for confirmation breakout.

At the beginning of October, STO ran down hard making a flag pole and in the last two month it has formed the Flag, better known as a pennant or triangle. At the top of the flag formation around the $15.00 mark, there is some weekly resistance which STO has been respecting. This $15 level is also 50% fibonnacci retracement from the top of the flag pole to the bottom. It is thought that flags which reach the 50% retracement mark are more likely to complete their pattern. Flag poles generally travel the same amount of distance each side of the flag. If this is applied to the STO flag there is a possible $10.50 go.

(click on image to elarge)