The Ascending Triangle pattern has a horizontal top line (1, 3, 5) representing a resistance level, and an upward-sloping bottom line (2, 4). The Breakout can either be up or down, and the direction of the Breakout will determine whether the Target Price is higher or lower.
This pattern is commonly associated with directionless markets, since the contraction (narrowing) of the market range signals that neither bulls nor bears are in control. When the price of a security consolidates around highs it might indicate that a significant downtrend is ahead.
If the price breaks out from the bottom pattern boundary, day traders and swing traders should trade with the DOWN trend. Consider selling the security short or buying a put option on the downward breakout price. To identify an exit, compute the target price by subtracting the pattern height from the breakout point. For downward breakouts the breakout level is the price at the lowest low within the triangle (2). The pattern height is the difference between the level of the top horizontal line and the lowest low.
To limit potential loss when price suddenly goes in the wrong direction, consider placing a stop order to buy back a short position or sell a put option at or above the breakout price.
Dividends are paid at certain intervals by companies who pay them. This might be quarterly, annually, or semi-annually
See the profitability of the Head-and-Shoulders Bottom pattern with Tickeron's Backtested Odds of Success. Learn more with our Pattern Search Engine.
The Symmetrical Triangle Top pattern forms when a currency pair price fails to retest a high or low and forms two trend lines
Adjusted Cost Basis (ABC) is the value of an item for tax purposes, adjusted for depreciation and expenditures
The Federal Reserve System is sometimes referred to as one bank, but it is in fact a network of 12 banks with 24 branches
Generally the lower income amounts will correspond to lower percentage toward federal income tax than higher income
The Federal Housing Administration runs the FHA loan program with the help of certified lending institutions
‘Buy to Cover’ is a term that applies when an investor buys shares of a security that they had previously sold short
The January Effect is a hypothesis which states that stocks will see their biggest monthly gains in January
Adaptive selling is a marketing principal where the product or services offered are modified based on the demographics