TRIANGLE

What DoesTriangleMean?
A technical analysis pattern created by
drawing trendlines along a price range that
gets narrower over time because of lower
tops and higher bottoms.
Technical analysts see a breakout of
this triangular pattern as either
bullish (on a breakout above the
upper line) or bearish (on a breakout
below the lower line).

Symmetrical Patterns

Symmetrical triangles are thought of as continuation

patterns developed in markets that are, for the most part,
aimless in direction. The market seems listless in its
direction. The supply and demand therefore seem to be one
and the same.
During this period of indecision,
the highs and the lows seem to
come together in the point of the
triangle with virtually no
significant volume. Investors just
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weeks leading up to the breakout.
Nine times out of ten, the

Ascending Triangle
Pattern
An uptrend is in place and the demand line, or lower
trendline is drawn to touch the base of the rising lows. The
two highs have formed at the top line. These highs do not
have to have reach the same price point but should be close
to each other.
Often abullish chart pattern, the
ascending triangle pattern in an
uptrend is not only easy to recognize
but is also a slam-dunk as a entryor
exit
signal.be noted that a recognized
It should
trend should be in place for the
triangle to be considered a
continuation pattern.
Most analysts will take a position once the price action breaks
through the top line of the triangle with increased volume,
which is when the stock price should rise an amount
equivalent to the widest section of the triangle.

Descending Triangle Pattern

The descending triangle pattern is the upside-down image of

the ascending triangle pattern. The two lows on the chart
form the lower flat line of the triangle and, again, have to be
only close in price action rather than exactly the same.

The descending triangle is recognized

primarily in downtrends and is often
thought of as abearish signal.
The development of the descending
triangle takes the same amount of time
as the ascending triangle, and volume
again plays an important role in the
breakout to the downside.

Leonardo Fibonacci was an Italian mathematician born in the 12th

century. He is known to have discovered the "Fibonacci numbers,"
which are a sequence of numbers where each successive number
is the sum of the two previous numbers.
e.g. 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, etc.
These numbers possess a number of interrelationships, such as the
fact that any given number is approximately 1.618 times the
preceding number.

Fibonacci
Numbers/Lines
Interpretation of the Fibonacci numbers in technical analysis
anticipates changes in trends as prices tend to be near lines
created by the Fibonacci studies. The four popular Fibonacci
studies are arcs, fans, retracements, and time zones.

Fibonacci Extensions
Levelsused in Fibonacci retracement to forecast areas of support or resistance.
Extensions consist of all levels drawn beyond the standard 100% leveland are
used by many traders to determine areas where they willwish to take profits. The
most popular extension levels are 161.8%, 261.8% and 423.6%.

In practice, most traders use

Fibonacci extensions in
combination with other
technical indicators/patterns
to help them determine
appropriate target prices. As
this chart shows, the 161.8%
level is often used to set the
price target on a breakout of
an ascending triangle. This
specific target is calculated
by multiplying the vertical
distance of the triangle by
the key Fibonacci ratio of