Things Are Looking Up
In case you’ve never heard of an ascending triangle before, or any stock chart pattern for that matter, you should know that they are part of the set of evaluation tools that technical analysts use to examine the past performance of a particular stock. Over a period of months or even years, patterns and trends will become visible in the stock’s track record, and because these patterns are destined to repeat each other, when they are spotted, an experienced analyst can use them to determine what will happen next with regards to the price of that stock.
Technical analysts consider the ascending triangle to be a bullish chart pattern identified by two trend lines that form a distinctly triangular shape on the stock charts. Look for the first trend line to become visible horizontally at the resistance line, while the second trend line becomes visible as a way of connecting the set of increasing troughs.
Generally, the ascending triangle is considered to be a bullish continuation pattern, which means that although there may be some dips and spikes along the way, this pattern will generally move in an upward direction over time. This pattern is very different from the symmetrical triangle, in that its horizontal line represents overhead supply preventing the security from moving past a certain price level. Even though the overall price might not be able to rise for a while, you can tell this pattern is forming by watching the lows get higher, applying pressure to the market and giving the pattern its bullish persuasion.