The Triangle Breakout
The triangle is a bullish reversal signal in a dynamic trend. The ascending triangle forecasts upside breakout from a downtrend, and a descending triangle forecasts downside breakout from an uptrend. The symmetrical triangle often is found during consolidation as the breadth of trading narrows, with the outcome possible in either direction.
Key Point
The triangle in consolidation takes on great importance. Any form of narrowing breadth of trading in consolidation points to a likely end of the sideways trend.
The shape and meaning of triangles are examined in detail in Chapter 3, “Resistance and Support—A Trend’s Moment of Truth,” which was focused on resistance and support as notable in uptrends and downtrends. However, ...
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