For today's chart we've chosen to take a look at DR Horton Inc (NYSE:DHI) because it is trading within an ascending triangle formation. As many of you know, the ascending triangle is constructed by a series of increasing troughs that fail to break through an identified price barrier. The clearly marked levels of support and resistance make this pattern is a favorite amongst many short-term traders.
A price move above the resistance is used to suggest that the bulls are in control of the direction and it is often followed by a quick move higher. As you can see from the chart below, a rise above $18 would likely trigger a wave of buy orders. We'd expect many traders to set their short-term target prices near the 161.8% Fibonacci extension level, which is near $23.