CONTINUATION DIAMOND PATTERN

Strong Bullish Trend. Volume should remain through the pattern formation
Usually form over several months in very active markets, Volume remains high during the formation of the pattern. The Technical Analysis occurs when prices break upward out of the diamond formation to continue the prior uptrend.

• Volume is an important factor to consider. A lack of a volume throughout the pattern is an indication that this pattern may not be reliable.


• Support can be found at the turning point of the lows and resistance at the top peak of the Diamond.

Underlying Behavior
This pattern forms because prices create higher highs and lower lows in a broadening pattern. Then the trading range gradually narrows after the highs peak and the lows start trending upward. The Technical Analysis occurs when prices break upward out of the diamond formation to continue the prior uptrend.

source : http://www.trending123.com/patterns/Continuation-Diamond-Chart-Pattern.html

BOTTOM TRIANGLE WEDGE CHART PATTERN

Possible reversal/renewal of a downward trend.

Direction depends on when volume returns
The pattern should display two highs touching the upper trend line and two lows touching the lower trend line.

Underlying Behavior

This pattern is a result of converging trendlines of support and resistance which give this pattern its distinctive shape. This occurs because the trading action gets tighter and tighter until the market breaks out with great force. Buyers and sellers find themselves in a period where they are not sure where the market is headed. Their uncertainty is marked by their actions of buying and selling sooner, making the range of the price movements increasingly tight. As the range between the peaks and troughs marking the progression of price narrows, the trendlines meet at the "apex".

The narrowing of the trading action and the decreasing volume of trade reflect the indecision in the market. Finally consensus or decision in the market is reached and this is reflected as the price breaks out of the Triangle/Wedge. A spike in volume on this breakout date reflects stronger consensus that the financial instrument should move in that direction.

source : http://www.trending123.com/patterns/Bottom-Triangle-Wedge-Chart-Pattern.html

Ascending Continuation Triangle

A bullish sign. Short term pattern (1 - 3 Months)




Watch-outs

• Volume is an important factor to consider. Typically, volume should diminish as the price swings back and forth between an increasingly narrow range of highs and lows. However, when breakout occurs, there should be a noticeable increase in volume. The pattern is not reliable if this does not happen.
• Price should breakout 60-80% of the length apex. The closer the breakout occurs to the apex the less reliable the formation
• Support at the lowest low and a line of resistance at the top of the Triangle.
• When prices are close to or touch the 200 day Moving Average this signal is considered stronger.

Underlying Behavior

This pattern with its increasingly higher lows and constant highs indicates that buyers are more aggressive than sellers. The pattern forms because of a supply of shares is available at a fixed price. When the supply depletes, the shares quickly breakout from the top trendline and move higher.

source : http://www.trending123.com/patterns/ascending_triangle.html