An Ascending Triangle Pattern is a <strong>bullish continuation pattern</strong> and usually occurs after a large run up in price. The time spent in the triangle is a period of price consolidation and the trend usually continues in the same direction as the previous trend.
The upper trend line of the Ascending Triangle is flat while the bottom or support line is sloping up. The sloping support line shows buyers pushing prices up gradually and that prices may eventually overcome the overhead selling and break through the horizontal upper trend line.
<strong>Measuring the move:</strong> Add the vertical distance of the open end of the triangle to the to the price at the breakout and this would give you an approximate price target for the next run up in price.
<strong>Trading the pattern: </strong>Traders should be watching the upper trend line of the pattern. A bullish entry signal is when price pierces through the upper trend line. An important thing to note when trading this pattern is avoiding a false breakout. By entering when prices close above the upper trend line or waiting for a retest of the upper trend line, traders can prevent themselves from entering on a false breakout.
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|Publication:||International Business Times - US ed.|
|Article Type:||Brief article|
|Date:||Nov 11, 2009|
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