In December 91 it again tested the low. After three bottoms without follow through selling we can be fairly confident that a base is in place for a bull market. At this point we are concerned that reversal of the bull market is at hand. Three weeks later we were stopped out. Now we are able to draw a trend line and a parallel channel line.
Prices advance nicely to the upper channel return line.
Prices break above the channel return line and hover above it, now the channel resistance return line acts as support so the likelihood is that, after a period of consolidation, a further price advance can be expected. Four weeks later it is executed. We are stopped out the very next week. Now we watch and see that the low of that week holds but resistance keeps occurring at 40, but with higher lows. Tentatively we can draw in our adjusted, large channel, which ultimately proves to be the main channel of ascent.