Ascending Triangle

An Ascending Triangle is usually considered bullish and is most often a continuation pattern where the uptrend continues after the pattern is complete (top diagram below) but also can be found in a reversal pattern when a downtrend reverses (see the last chart below).

When this pattern forms in an uptrend, the price will enter the pattern from the bottom left as shown in the diagram below.

When this pattern forms in a downtrend, the price will enter the pattern from the top left as shown in the example chart towards the bottom of this page. The entry point is the only difference in appearance.

***ad3rdparagraphctr.shtml***

Taking a look at the Ascending Triangle stock chart pattern below, you will notice a few things that help identify this particular pattern:

Ascending Triangle Chart Pattern

First of all, when the top price points of the triangle are connected, they appear to form a horizontal line. Also, the when connecting the bottom price points of the triangle, these form an upward sloping line, hence the name "Ascending Triangle".

As the price enters the top area of the pattern, buying is exhausted and sellers take over, causing the price to move lower.

As the price moves to the low in the pattern, buyers step in and push the price higher once again, overpowering the sellers. Each time sellers step in at the top of the pattern, they do so with less and less conviction which causes the higher lows to be formed as the pattern evolves.

Finally, at the end of the pattern sellers give up and buying takes control causing a breakout to the upside in the majority of instances. As the pattern nears its end point, volume typically decreases until the point of the breakout which is usually a spike in volume.

So the characteristics of an Ascending Triangle are higher consecutive lows with a common high that forms a temporary upper resistance level, or horizontal line when viewing the pattern on a chart.

Keep in mind that just as in any other stock chart pattern, prices will often fluctuate from the pattern boundaries and variations should be expected. Allowing for these fluctuations will lessen the chance of being stopped out on a fakeout. Below is an example of an Ascending Triangle Reversal Chart Pattern:

Ascending Triangle Chart Pattern

You can see that once the pattern ended and a breakout to the upside occurred, the volume spiked also. The red dotted lines towards the end of this pattern are example stop loss price levels if entering a long position at/near the end of the pattern.

I have shown two example stop loss levels depending on whether you have gotten in near the bottom trend line or at/above the breakout. Of course each of our stop loss levels should be determined by our own Risk Management guidelines and will vary. If our Stop Loss levels were triggered, it would mean that the pattern has probably not ended and would negate the reason for entering a long position.

Here are more pages to help with various chart patterns:





Return From "Ascending Triangle" To "Stock Chart Patterns"


Elliott Wave Videos

Learn to trade in the direction of the forecasted trend with this free video course. Click here to start watching: Free Elliott Wave Video Lessons

Free Newsletter Updates

Trading Resources

Stock Trading Software
Stock Trading Software
Stock Trend AnalysisStock Trend Analysis