USTT stock breaks out and starts consolidation
This is the ‘After’ part of my ‘Before and After’ feature on USTT. As it turns out USTT did move out of the ascending triangle pattern and it also did so with sufficient volume to make it a valid breakout.
USTT moves 37% from ‘Steam Kettle Pattern’
Everything about the stock chart setup on March 3rd, 2005 was very good. The only bad thing was the fact that USTT is a very illiquid OTC BB stock that is never a good thing for anyone. However it was worth writing about to profile it as a great example of what I call a ‘steam kettle pattern’. I call it a steam kettle pattern because there is a price pattern building under a long-term resistance area with building heavy volume. The volume in this case is the ‘steam’ and the price pattern itself is the cause. A lot of the time the price chart pattern that builds under the long-term resistance is usually an ascending triangle. For the highest success rate, that would be the type of price pattern you would want to see. In my opinion this is always a great pattern to watch out for. The problem is that it is also very hard to find and will likely take you many hours of searching. All the right elements need to be in place for a stock or commodity to qualify as a ‘steam kettle pattern’.
Anyway, to sum up, USTT did make a valid breakout of the .18 level because it was done with equal or greater volume than the highest volume swing in mid February. This was necessary for the breakout to be valid. Now it appears that USTT is in a minor consolidation pattern and I do not know if it will continue higher here or not. The time to exit shorter term positions is always on high volatility, high volume spikes, especially illiquid ones like USTT. It seems likely that USTT will possibly return to .18 for a retest of the breakout level? This is always a very common occurrence and it is the same type of thing I am currently expecting in another price chart I just wrote about 2 postings ago. If the retest does not materialize then expect a move to next resistance at .28
Peace.
I’m out.
tc