Working Money magazine.  The investors' magazine.
Traders.com Advantage

INDICATORS LIST


LIST OF TOPICS





Article Archive | Search | Subscribe/Renew | Login | Free Trial | Forgot ID?


PRINT THIS ARTICLE

ASCENDING TRIANGLES


Ascending Triangles

05/17/00 02:52:52 PM
by Jason K. Hutson

The triangle bottom is signaled by an ascending triangle in which a flat upper trendline and ascending lower trendline meet and compel prices within the two lines.


Security:   N/A
Position:   N/A

In the ascending triangle bottom, the ascending triangle usually acts as a continuation pattern in an uptrend, but sometimes can be found at the bottom of a downtrend, signaling a reversal. The ascending triangle, one of two right-angle triangle patterns, has a flat upper trendline while the lower trendline slopes up. This is indicative of more aggressive buying than selling as the lows get progressively higher, while the highs make it to about the same level each time before breaking out to the upside.

The completion of the formation occurs when prices break through the upper flat trendline, usually close to the apex of the triangle. This signals bullish conditions. Similar to other patterns, in this case, prices could retrace to the horizontal trendline before resuming their upward path but not reenter the triangle. Unlike symmetrical triangles, which are neutral in predicting breakout direction, ascending triangles usually break out to the upside. This is also true when preceded by an uptrend. Therefore, ascending triangles act as a continuation pattern, rather than a bottom.

Graphic provided by: traders.com.
 
Typically, volume will contract during the formation of an ascending triangle bottom and then increase during the breakout above the flat trendline. This corresponds to the number of shares for sale diminishing at the upper trendline price, as buyers bid the stock up and try to catch the breakout.



Jason K. Hutson

Traders.com Staff Writer. Enjoys trendlines, support and resistance, moving averages, RSI, MACD, ADX, Bollinger bands, parabolic SAR, chart formations, and volume analysis.

Title: Industrial Engineer
Company: Technical Analysis, Inc.
Address: 4757 California Ave SW
Seattle, WA 98116
Phone # for sales: 206 938 0570
Website: Traders.com
E-mail address: JasonHutson@Traders.com

Traders' Resource Links
Charting the Stock Market: The Wyckoff Method -- Books
Working-Money.com -- Online Trading Services
Traders.com Advantage -- Online Trading Services
Technical Analysis of Stocks & Commodities -- Publications and Newsletters
Working Money, at Working-Money.com -- Publications and Newsletters
Traders.com Advantage -- Publications and Newsletters
Professional Traders Starter Kit -- Software

Click here for more information about our publications!


Comments or Questions? Article Usefulness
5 (most useful)
4
3
2
1 (least useful)

Comments

Date: / /Rank: 4Comment: This looks like the Novice Traders Notebook. Nice!!!
Date: 02/13/01Rank: 3Comment: my question is that even though the triangle led to an up move, I ve found that because it doesn t have a strong base (a period of accumulation) that it will retreat lower after the move. Have you found the same and if so are these formations just for short-term trades or to catch a move up? Thanks
Date: 02/13/01Rank: 3Comment: my question is that even though the triangle led to an up move, I ve found that because it doesn t have a strong base (a period of accumulation) that it will retreat lower after the move. Have you found the same and if so are these formations just for short-term trades or to catch a move up? Thanks
PRINT THIS ARTICLE





S&C Subscription/Renewal




Request Information From Our Sponsors 

DEPARTMENTS: Advertising | Editorial | Circulation | Contact Us | BY PHONE: (206) 938-0570

PTSK — The Professional Traders' Starter Kit
Home — S&C Magazine | Working Money Magazine | Traders.com Advantage | Online Store | Traders’ Resource
Add a Product to Traders’ Resource | Message Boards | Subscribe/Renew | Free Trial Issue | Article Code | Search

Copyright © 1982–2019 Technical Analysis, Inc. All rights reserved. Read our disclaimer & privacy statement.