As far as I can tell, this chart pattern is known as a Diamond. One of my favorite sites of reference is Bulkowski's thepatternsite.com where you can find a wealth of information regarding chart patterns and how to measure/trade them.
Diamond Tops can break up or down. The measuring rule calculates the difference between the high and low point of the diamond, in this case a $34 range (not shown, but easy to see), which would be added to or subtracted from the breakout price.However, since price has made a quick and nearly vertical rise into the pattern, a measuring rule like the one just described may be impractical. For instance, if we were to break out in the $70 range a measured move would put us at $104 (new highs) or $36 to the downside (levels not seen since June of this year). While anything is possible, measured moves aren't precise, so perhaps we should be a little more conservative in our estimates.
A break-down from here could, more likely, be suspected to return price to the point where it was before the vertical rally (around the $50-$55 range).
A breakout to the upside would put us testing the highs, in the $85-$90 range.
Some of the key concepts that Thomas Bulkowski teaches with this pattern include;
"High velocity moves after the pattern often follow high velocity moves leading to the pattern."
"A rising volume trend results in the best post-breakout performance."
We should also keep in mind (even though not shown in the chart) that volume has been declining ever since the early part of this pattern and also, the two extreme highs have been red/bearish candles.
Remember, this is an inverse ETF of the Q's. A break to the upside = crashy crashy. To the downside = bear market rally!
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