Descending Triangle Chart Pattern

After symmetrical and ascending chart patterns now we will be moving to descending triangle chart pattern. Let's have a look how it looks like:

Descending Triangle:

In case of a descending triangle formation, we will see the lower support line to be constant while the upper resistance line will be falling downwards. This pattern is bearish in nature and represents increasing selling power. The pattern is completed once the price breaks below the lower support line. The ideal entry points for shorts occurs when the price breaks out below the lower support line. As the charts shows there is usually a pull back again towards the support line after break down has occurred,this offers the technical analyst another good point to short the stock.

Targets are set by measuring the base of the triangle from the point of breakout as labelled in the diagram.

Following are some more examples of descending triangle chart pattern:

So, the major points to remember for ascending triangle chart pattern:

1) In case of descending triangle formation the support line will be constant and resistance line will be falling downwards

2) The pattern is completed when the price breaks below the support line.

3) Targets are established by measuring the width of the base of the triangle from the point of breakout

4) After breakout has been occurred there can be a pull back again towards the point of breakout, this is an ideal entry point to go short or exit your long positions.

5) As technical analysis deals with probabilities there can be nothing which works all the time so it would be good to keep stop loss slightly above the point of breakout so that we can get stopped out at right time if things don't work as per our expectations.

For scanning out stocks for ascending triangle pattern check out this link

Also check: Best books for Traders/ Investors

Happy Learning
The Stock King

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Write comments
Amrit Rathi
April 3, 2015 at 10:04 PM delete

how is zerodha have edge over Rksv
lyk rksv providing 5 free trades
as i m intersted to open a new account need ur assistance

April 3, 2015 at 10:11 PM delete

Hi Abhishek, fundamentals of Sanghvi movers? one can enter this counter now?

April 3, 2015 at 10:39 PM delete

bro rksv and zerodha are equally good u can go for the one which you wish........

April 3, 2015 at 10:42 PM delete

looks good on charts fundamentally not that attractive u can buy and hold till trend reverses. Regards