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