Ascending Triangles

Ascending Triangles

This type of graphical pattern in technical analysis occurs when there is a resistance level and an upward slope formed with the low peaks.

 

[caption id="attachment_706" align="aligncenter" width="320"] Ascending Triangles[/caption]

What happens during this time is that there is a certain level of price that buyers can not beat. However, they are gradually starting to push the price up, as is evident with the low peaks.

[caption id="attachment_707" align="aligncenter" width="499"] Ascending Triangles[/caption]

In the chart above you can see how the buyers start to gain strength because they are doing low spikes upwards (The lows are getting higher).

They continue to put pressure on that level of resistance and as a result, price breakage is about to happen. The question is:

In what direction will it be? Will buyers be able to break the resistance level or will the resistance become stronger?

Many books on graphics will tell you that in most cases, buyers will win this battle and the price will break resistance. However, from our own experience we know that this is not always the case. Sometimes the resistance level is very strong and there is simply not enough buying power to break it.

Most of the time, the price will actually rise. It does not really matter much which direction to move the price, we can be ready for a move in either direction. In this case, we could place a pending order (order limit >> More info in article Order Types) above the resistance line and another below the slope of the low peaks.

[caption id="attachment_708" align="aligncenter" width="501"] Ascending Triangles[/caption]

In this scenario, buyers won the battle and the price went up almost to heaven!

NOTE: This article is not an investment advice. Any references to historical price movements or levels is informational and based on external analysis and we do not warranty that any such movements or levels are likely to reoccur in the future.