On the monthly chart of FIL, a descending triangle pattern has been forming since early 2023, with solid support at $3.50 and a downward-sloping resistance. Currently, the price shows considerable accumulation at the support level, signaling a potential medium to long-term trend reversal.
A breakout above the key resistance around $20.14 would be a strong bullish signal. The first target following the breakout is $27.50, which represents the previous resistance zone and is a crucial area where traders may encounter selling pressure. If the bullish momentum persists, the next potential target lies between $37.50 and $42.50, an area of historical resistance and a possible new distribution zone.
However, if the price fails to surpass the $20.14 resistance or drops below the $3.50 support, this could signal a continuation of the bearish trend. In such a case, the price might decline toward the next psychological support level, although this scenario seems less likely given the accumulation pattern.
Additional indicators, such as trading volume, suggest a decrease in selling pressure, which strengthens the likelihood of a bullish breakout. Traders should watch for confirmation of a breakout above $20.14 with high volume before entering a position to take advantage of the potential for a more substantial uptrend.
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