Shares of Garibaldi Resources (TSX-V:GGI) have spent 2018 in a wide oscillation between C$2.00 and C$3.50 with the most recent price action focused around the midpoint of that range (C$2.60-C$2.80):

GGI.V (Daily - 1 Year)

GGI has carved out a 'descending triangle' during the last several months and the recent rally following last Friday's NR bumped up against a critical downtrend line drawn from the May peak at C$3.60.  The fact that this trend line has been touched on no less than four different occasions since May means that it takes on extra importance - particularly in the event that it is eventually decisively breached during a breakout move. 

If we zoom in a bit and look at the most recent daily candlesticks we can see that GGI is exhibiting signs of extreme indecision as evidenced by a 'long-legged doji' candlestick on Wednesday followed by a 'spinning top' candlestick today:

GGI.V (Daily)

The fact that GGI has spent the vast majority of 2018 churning within a narrowing range focused near the current price level (~$2.70) means that there is a tremendous amount of pent-up energy that could be released in the event of a resolution to the aforementioned descending triangle pattern. 

While descending triangles are typically considered to be bearish chart patterns, I believe in this instance the pattern could really resolve either way without a high degree of probability pointing towards either a bullish or bearish resolution. However,  I believe the eventual resolution to this pattern will lead to a very large move; in the event of an upside resolution I could see GGI shares retesting the all-time highs near C$5.00, whereas, a breakdown below support between C$2.00-$2.25 could easily result in GGI shares trading back below C$1.00.  Therefore, I am much less interested in trying to predict the direction of the move and much more interested in trading the eventual chart breakout/breakdown. 


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