| While another Classic Pattern has already been | | | | should steer away from making trade decisions |
| discussed in our Learn Technical Analysis Free series, | | | | based on it. |
| we should also be introduced to the Ascending | | | | Moving Average should also be taken into |
| Continuation Triangle pattern rather early. This Classic | | | | consideration. If the pattern's prices touch or come |
| Pattern will take shape when two high levels of a | | | | close to the 200-day moving average, then the |
| trading range are connected by a horizontal line | | | | pattern is considered strong. |
| (indicating a resistance level) and a rising line that are | | | | Duration also needs to considered, something many |
| joined by two higher lows of that same range | | | | investors who have just started to learn technical |
| (please visit the site for a visual). | | | | analysis tend to forget. Break-out will happen when |
| For investors who want to learn technical analysis, | | | | the price penetrates the upper horizontal line (e.g. the |
| the Ascending Continuation Triangle is an important | | | | resistance line), but this occurrence should happen |
| pattern as it provides us with a Bullish trading signal. | | | | long before the pattern reaches the apex, or |
| Since the pattern is normally a short-term pattern | | | | right-side tip of the triangle. Generally speaking, this |
| that takes shape over one to three months, | | | | break-out should occur between three-quarters to |
| investors are able to quickly lock in gains and reverse | | | | two-thirds of the way along upper line. |
| their position without much loss. | | | | In terms of explaining, in fundamental terms, how the |
| For investors who are just starting to learn technical | | | | Ascending Continuation Pattern evolves, consider a |
| analysis, remaining patient as the pattern takes shape | | | | large institutional investor who wants to unload a |
| is often more difficult than spotting the pattern itself. | | | | large quantity of stock at a certain price. The order is |
| To confirm the pattern, here are a few things one | | | | placed. Once that price is reached, buyers will draw |
| should look for: | | | | on the large supply and consequently, for other |
| Volume is probably the most important confirming | | | | sellers to fill their orders, the price will need to drop. |
| factor when it comes to this pattern. As the pattern | | | | This will create a resistance line. However, once that |
| takes shape, volume should be diminishing. When the | | | | large supply of stock is exhausted, the price will |
| pattern is confirmed and there is a breakout, volume | | | | continue to climb as it normally would, providing the |
| should spike. Lacking this volume spike at breakout, | | | | breakout that investors who want to learn technical |
| investors should no consider the pattern reliable and | | | | analysis are waiting to see. |