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Bullish Pennant forming in Russia ETF RSX

|Includes: VanEck Vectors Russia ETF (RSX)

Market Vectors Russia ETF (RSX) has been forming a bullish pennant formation which is sitting at support, previously resistance, of a greater than one year basing period. This is bullish behavior and prone to a strong continuation breakout to the upside. 
RSX Daily Chart
Given that price is moving closer to the apex of the triangle, the chance of a breakout in the next week seems likely. Alternatively, this consolidation pattern may evolve into a larger triangle, or a different form. Or, it could fail by declining through bottom support of the consolidation. 

The pennant pattern has two components. It usually starts with a strong clear rally, referred to as the pole, before consolidation forms into a small triangle. In this case, we have two days last week inside the pennant consolidation which each hit a high of $37.26, thereby providing confirmation of a resistance level that can be used to signal a breakout of the pennant. 
RSX Daily Chart
We can arrive at a target based on the pennant pattern by taking the length of the pole, and adding it to the breakout price. The start of the pole is $34.63 and the top is $37.40 for a difference of $2.77. Adding $2.77 to $37.26 gives us a target of $40.03. This is pretty close to the 127.2% Fibonacci extension of the downtrend begun from the April 14, 2010 high. (

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in RSX over the next 72 hours.