Dow Jones Transportation Average ($TRAN): Daily Failed Bearish Gartley Potential Reversal Zone (PRZ) in a Bullish Trend Channel

The enlarged chart of the pattern’s PRZ in Figure 4.27 shows how the price action reversed nominally on the initial test of this area. The index consolidated in the PRZ for a short while before continuing higher.

Figure 4.27.

The decisive breakout above the prior harmonic resistance established by the pattern was the technical entry point within this setup. Although not all failed patterns will possess such decisive price action, as is the case with the Dow Transports, most valid continuations will adhere to the predominant bias established by the primary uptrend.