Champion Enterprises Inc - Chart of the Day | May 06, 2008 | By Casey Murphy

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Champion Enterprises Inc - Chart of the Day

May 06, 2008 | By Casey Murphy

For today's chart we've chosen to take a look at Champion Enterprises Inc (NYSE:CHB) because it is trading within a symmetrical triangle pattern. As you can see from the chart below, the converging trendlines have acted as levels of support and resistance in the past and traders will now watch closely to see which of these barriers will be broken first. The price is currently finding support near the lower trending, which suggests that it may be nearing an influential turning point. A drop below $9.60 will be used by the bears to signal an increase in selling pressure and it will likely be followed by a sharp drop. In addition, it wouldn't be surprising to see traders wait for a spike in volume because it is a common sign of a valid breakout and it is often accompanied by a rise in volatility.