Analyzing Ascending Triangle Chart Patterns

In Continuation with Last week article of Trading Stocks with Symmetrical Triangle’s Chart Pattern lets discuss another triangle pattern

Ascending Triangle Pattern

Ascending Triangle: This pattern comprises of 2 trendline, one drawn horizontally to mark the resistance, second trendline connects increasing slope of higher low. It is generally a continuation pattern formed during consolidation after an uptrend. Volumes generally diminishes during the formation of the pattern

Ascending Triangle chart pattern should contain at least 2 similar highs not exactly equal but in proximity to form the upper horizontal trendline. To form the lower ascending trendline at least two higher lows are required. We would set an entry order above the resistance line and Sell order below the slope of the higher lows.

Note: If a more recent reaction low is equal to or less than the previous reaction low, then the ascending triangle is not valid.

Let’s elaborate the Ascending Triangle formation with an Example of S&P 500 15 Mins Chart.

As seen in the below chart S&P 500 is unable to cross the resistance line of 1279 for at least 5 times. Every attempt to cross 1279 is met with selling pressure. Also it can be noted that Buyer start to gain strength as S&P starts making higher lows ie. 1257 and 1265 as shown in below chart.

Ascending Triangle Breakout is seen in the below chart after it broke 1279 supported by volumes.

Target Calculation:

High of Range: 1279

Low of Range: 1257

Difference: 22 (1279-1257)

Breakout Point:1279

Target: Breakout Point + Difference of Range ie. 1279+22 =1301.

Few More Examples

GOLD Ascending Triangle breakout

Ascending Triangle pattern in Larsen

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