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Ascending Triangle Formation

The ascending triangle is a bullish chart pattern formed by a series of rising lows and a series of equal highs, creating an ascending support line and horizontal resistance line. It indicates accumulation by buyers and suggests an impending breakout to the upside. When the price breaks above the resistance line, it signals buyers have overcome sellers and the price will likely rise significantly. Ascending triangles usually last 10-15 candlesticks and see decreasing volume as the pattern forms.

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106 views8 pages

Ascending Triangle Formation

The ascending triangle is a bullish chart pattern formed by a series of rising lows and a series of equal highs, creating an ascending support line and horizontal resistance line. It indicates accumulation by buyers and suggests an impending breakout to the upside. When the price breaks above the resistance line, it signals buyers have overcome sellers and the price will likely rise significantly. Ascending triangles usually last 10-15 candlesticks and see decreasing volume as the pattern forms.

Uploaded by

Surya Nayak
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Ascending

Triangle Formation

Ascending triangle is one of the most important and easily available chart patterns; it shows us
accumulation of stock/commodity/forex/other trading instruments by smart money. Thus it can
guide us for impending price rise and a solid bullish move.

How to identify

1. Ascending triangle looks like a right angle triangle.


2. It forms by a series of rising lows and a series of equal highs
3. If we connect all the rising lows with a trend line, we get one ascending trend line
4. If we connect all the equal highs with a trend line, we get one flat trend line
5. The formation looks like the following picture
What it means

The lower trend line shows the demand while the upper trend line shows the supply. In this case,
demand is rising so when price violates the flat trend line, seller side get defeated by buyers and
thus price zooms upward.

Characteristics

Trend:
The ascending triangle is a bullish pattern, the length and duration of the current trend is not as
important as the robustness of the formation, which is paramount.

Duration:

The length of the pattern can range from 4-5 candles to 15-20 candles with the average pattern
lasting from 10 to 15 candles.

Volume:
As the pattern develops, volume usually contracts. When the upside breakout occurs, there should
be an expansion of volume to confirm the breakout

Return to Breakout:
A basic tenet of technical analysis is that resistance turns into support and vice versa. When the
horizontal resistance line of the ascending triangle is broken, it turns into support. Sometimes there
will be a return to this support level before the move begins in earnest.

Examples
In this chart, we have a series of highs around 2000 zone , which, if connected by a trend line, gives
us the flat, upper trend line, while if we connect the lows, we get a rising lower trend line, thus the
formation shows symptoms of ascending triangle.

A buy was supposed to be placed above flat upper trend line and then price zoomed to 2100!!!!
Here we see two ascending triangles formed, one around 350 area and another around 450 area, in
both the cases we can see when price went above the respective upper trend line, solid bullish move
followed.
Same case here, we got upper trend line near 1300 zone, which, when violated, gave an up move up
to 1800 before showing slightest weakness
Again we get same case, our upper trend line is around 540 which, when broken, gave us a move up
to 600
Ascending triangle, after a breakout above 265, price zoomed to 310 levels
Well this is our last example, here after a break out above 800 u got an one way ticket to 1000!!!

So this was a part of our small effort to empower the retail investor , so that the relatively fresher
traders/investors can take a little more informed decision, you are free to use /share this e book as
long as u don’t edit any part.

For any question or suggestion, plz feel free to visit

https://www.facebook.com/marketmover

https://www.facebook.com/tushar.chatterjee.77

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