UPDATE: False breakdown Sets Up PowerShares Agriculture ($DBA) For Next Leg Higher

In ourĀ 4/2 ChOTD, we highlighted the fact that the PowerShares Agriculture Fund ($DBA) was forming a double inside week right at a major Fibonacci Retracement resistance cluster:

We mentioned that “the breakout from this pattern could be explosive. As always (particularly these days), a false breakout that is reversed could result in an especially explosive move in the other direction.” The false break was indeed what the fund did, to the downside. Its subsequent reversal above the triangle sets it up for that explosive next upleg. Here is the daily chart:

It is currently trading at the low end of the consolidation range above its triangle breakout area and presents an attractive risk/reward long entry point (although, confirmation of the potential upleg would come after a convincing breakout above the previous high and key Fibonacci levels.

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