How to trade Ascending Triangle Chart Pattern

By | March 15, 2013

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.

S&P 500 15 Mins 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.

SPY Ascending Triangle

 

Few More Examples

  • GOLD Ascending Triangle breakout

gold breakout

 

  • Ascending Triangle pattern in Larsen

2011Jun-LARSEN-TOUBRO-LTD.-800x600

Follow on Facebook during Market Hours: http://www.facebook.com/pages/Brameshs-Tech/140117182685863

You can register your email address under Post In your Inbox(Right Side Column) if you want to receive mail instantaneously as soon as site get updated. You will receive a confirmation mail in your registered email address you need to click on link to get it confirmed

One thought on “How to trade Ascending Triangle Chart Pattern

  1. abhi singh

    dear sir,

    i am regular visitor of your blog. your charting view is exelent . if you may post currency view then this is best my type of currency trader.

    abhi singh

Leave a Reply