Triangle-Shaped Trends

Another formation, potentially setting up strong continuation patterns, is the triangle. Unlike the wedge, which is a reversal, the triangle is a continuation pattern. The ascending triangle is bullish. This means it has to be found during an existing uptrend. It consists of a flat resistance with at least two reaction highs and rising support with at least two reaction lows. The triangle narrows until price levels break through and rise above resistance, ideally forming a new support on a flip from resistance.

An example of the pattern is found in Figure 3.7.

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Figure 3.7 Resistance and support—ascending triangle (Chart ...

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