Thursday, October 25, 2018

Formation of a Upward Sloping Triangle often Represents a New Bullish Market Trend

(Click on the image to enlarge)
The Median Sale Price chart (top) shows the meteoric growth in the first half of 2017, followed by healthy sideways within a tight range of $545K to $555K. Even the December drop - nothing spectacular - was quickly reversed, pointing to solid market fundamentals. 

The fact that the 2-Month Moving Average trendline follows closely the data line indicates a fairly non-volatile price curve. Both trendlines are however confirming the reversal, including the peak. Any breakout above the prior high of $557K would make the curve even more backward-bending (more bullish).

The normalized Price per SF trend (bottom chart) is so bullish that a linear trendline was in order (of course, for demonstration purpose). The formation of the upward sloping triangle further adds to the bullishness. 

In an event like this in the equity market, traders would initiate long positions. 

Again, the moving average trendline proves the lack of month-to-month volatility, though confirming the reversal as well as the fantastic breakout.       

- Sid Som, MBA, MIM
President, Homequant, Inc.

No comments:

Post a Comment