Traderji.com - Discussion forum for Stocks Commodities & Forex


Ascending Triangle

Discuss Ascending Triangle at the Technical Analysis within the Traderji.com - Discussion forum for Stocks Commodities & Forex; Will anybody please explain 1)what is ascending triangle? 2) How to detect the formation of ...


Go Back   Traderji.com - Discussion forum for Stocks Commodities & Forex > METHODS & STRATEGIES > Technical Analysis


Technical Analysis Discussion of all the principles involved in technical analysis.


Reply
 
Thread Tools
  #1  
Old 17th September 2005, 11:15 PM
Member
 
Join Date: Aug 2004
Posts: 18
Thanks: 0
Thanked 0 Times in 0 Posts
trading_learner is on a distinguished road
Default Ascending Triangle

Will anybody please explain
1)what is ascending triangle?
2) How to detect the formation of ascending triangle?
3) How safely I can take buying decision based on ascending triangle? What other parameters or indication should one look for along with ascending triangle?
4) Is there something like reverse of ascending triangle, where one can take exit decision?

T_learner



Reply With Quote
Sponsored Links
  #2  
Old 18th September 2005, 03:32 AM
karthikmarar's Avatar
Member
 
Join Date: Jul 2005
Location: kuwait
Posts: 1,527
Thanks: 75
Thanked 1,122 Times in 193 Posts
karthikmarar has much to be proud ofkarthikmarar has much to be proud ofkarthikmarar has much to be proud ofkarthikmarar has much to be proud ofkarthikmarar has much to be proud ofkarthikmarar has much to be proud ofkarthikmarar has much to be proud ofkarthikmarar has much to be proud ofkarthikmarar has much to be proud of
Default Re: Ascending Triangle

Hi T-Learner

Actually this post should have been in the "Technical Analysis " section. You already know that the ascending triangles are for "Buy" and reverse of this is for "sell".

Anyway the basics are as follows...

When the price forms two or more peaks of equal height and two or more higher troughs (lows) then the pattern formed is called ascending triangles. The equal peaks form a horizontal line. The trend line drawn through the rising troughs is an ascending trend line, which will converge towards the horizontal line. This pattern is formed when the price moves up and it becomes overbought. The selling, which emerges pulls down the price. However buying resurfaces and takes the price up again. The price is unable to break the previous resistance (recent high) and is pulled down again. But buying emerges at a higher level than before and takes the price higher again. Most recent one I came across is of BILT. Chart enclosed for reference.

Ascending triangle is very easy to spot. They are considered bullish patterns are very reliable when found in an up trend.

At some point the price breaks the resistance and is propelled to much higher levels on renewed buying interest. In other word the price “breaks out” of the ascending triangle and moves upwards. Also note that normally the volume contracts during the ascending triangle pattern and when the breakout happens volume increases. The volume increase is considered as a confirmation of breakout. You can have a look at the price breaking out the ascending triangle and the corresponding increase in volume in the enclosed chart of BILT. The concept of breakout has been discussed extensively in a separate thread with excellent posts by Amit, Saint and Ajay. Please refer this tread for more details.http://www.traderji.com/technical-analysis/3392-breakout.html

So ascending triangle present good buying opportunities during the breakout. So one has to look for the breakout with good increase in volume. The price should close higher than the resistance line (top horizontal line) with increased volumes.

The reverse of the ascending triangles is the descending triangles, which are bearish patterns that breakout out in the down side. These can be noticed by their horizontal support lines and descending trend line at the top.

Regards

karthik

Last edited by karthikmarar; 20th May 2008 at 12:31 AM.
Reply With Quote
  #3  
Old 18th September 2005, 04:55 AM
Member
 
Join Date: Sep 2005
Posts: 8
Thanks: 2
Thanked 0 Times in 0 Posts
eshwar_in is on a distinguished road
Default Re: Ascending Triangle

karthik,

good info for a newcomer like me
Reply With Quote
  #4  
Old 18th September 2005, 09:29 AM
Member
 
Join Date: Jun 2005
Posts: 369
Thanks: 0
Thanked 0 Times in 0 Posts
roneeth is on a distinguished road
Default Re: Ascending Triangle

Hello Karthik!

Excellent Explanation and Well Supported with the Chart.

Regards

Roneeth
Reply With Quote
  #5  
Old 18th September 2005, 03:53 PM
Member
 
Join Date: Jul 2005
Posts: 7
Thanks: 0
Thanked 0 Times in 0 Posts
zen4all is on a distinguished road
Default Re: Ascending Triangle

thanks a lot karthik,
Reply With Quote
  #6  
Old 18th September 2005, 04:23 PM
Member
 
Join Date: Mar 2005
Posts: 2,885
Thanks: 94
Thanked 643 Times in 183 Posts
AMITBE is a splendid one to beholdAMITBE is a splendid one to beholdAMITBE is a splendid one to beholdAMITBE is a splendid one to beholdAMITBE is a splendid one to beholdAMITBE is a splendid one to behold
Default Re: Ascending Triangle

There you go Karthik...you've gotten there...and moving on!
Good work!
Reply With Quote
  #7  
Old 18th September 2005, 05:03 PM
Member
 
Join Date: Jun 2005
Posts: 369
Thanks: 0
Thanked 0 Times in 0 Posts
roneeth is on a distinguished road
Default Re: Ascending Triangle

Hello !

Just to Add on to Karthiks Explanation...Some bits from my Notes

The ascending triangle is a bullish formation that usually forms during an uptrend as a continuation pattern.They are bullish patterns that indicate accumulation.They are also called as Right Angle Triangle.Two or more equal highs form a horizontal line at the top. Two or more rising troughs form an ascending trend line that converges on the horizontal line as it rises. If both lines were extended right, the ascending trend line could act as the hypotenuse of a right triangle. If a perpendicular line were drawn extending down from the left end of the horizontal line, a right triangle would form.


Top Horizontal Line: At least 2 reaction highs are required to form the top horizontal line. The highs do not have to be exact, but should be within reasonable proximity of each other. There should be some distance between the highs, and a reaction low between them.

Lower Ascending Trend line: At least two reaction lows are required to form the lower ascending trend line. These reaction lows should be successively higher and there should be some distance between the lows. If a more recent reaction low is equal to or less than the previous reaction low, then the ascending triangle is not valid.

Duration: The length of the pattern can range from a few weeks to many months with the average pattern lasting from 1-3 months.

Volume: As the pattern develops, volume usually contracts. When the upside breakout occurs, there should be an expansion of volume to confirm the breakout. While volume confirmation is preferred, it is not always necessary.

Return to Breakout: A basic of technical is that resistance turns into support and vice versa. When the horizontal resistance line of the ascending triangle is broken, it turns into support. Sometimes there will be a return to this support level before the move begins in earnest.

Target: Once the breakout has occurred, the price projection is found by measuring the widest distance of the pattern and applying it to the resistance breakout.

I hope this will be helpful.

Regards

Roneeth
Reply With Quote
  #8  
Old 18th September 2005, 06:13 PM
Member
 
Join Date: Mar 2005
Posts: 2,885
Thanks: 94
Thanked 643 Times in 183 Posts
AMITBE is a splendid one to beholdAMITBE is a splendid one to beholdAMITBE is a splendid one to beholdAMITBE is a splendid one to beholdAMITBE is a splendid one to beholdAMITBE is a splendid one to behold
Default Re: Ascending Triangle

Wow Roneeth! Keep right there good friend! Way to go.
Hey, pretty soon you'd be taking care of your father's portfolio, to say nothing of your own!
Three Cheers.
Reply With Quote
  #9  
Old 18th September 2005, 06:37 PM
Member
 
Join Date: Jul 2004
Posts: 8,787
Thanks: 1,145
Thanked 13,324 Times in 2,392 Posts
Saint has a reputation beyond reputeSaint has a reputation beyond reputeSaint has a reputation beyond reputeSaint has a reputation beyond repute
Saint has a reputation beyond reputeSaint has a reputation beyond reputeSaint has a reputation beyond reputeSaint has a reputation beyond reputeSaint has a reputation beyond reputeSaint has a reputation beyond reputeSaint has a reputation beyond reputeSaint has a reputation beyond reputeSaint has a reputation beyond reputeSaint has a reputation beyond repute
Default Re: Ascending Triangle

Quote:
Originally Posted by karthikmarar
Hi T-Learner

Actually this post should have been in the "Technical Analysis " section. You already know that the ascending triangles are for "Buy" and reverse of this is for "sell".

Anyway the basics are as follows...

When the price forms two or more peaks of equal height and two or more higher troughs (lows) then the pattern formed is called ascending triangles. The equal peaks form a horizontal line. The trend line drawn through the rising troughs is an ascending trend line, which will converge towards the horizontal line. This pattern is formed when the price moves up and it becomes overbought. The selling, which emerges pulls down the price. However buying resurfaces and takes the price up again. The price is unable to break the previous resistance (recent high) and is pulled down again. But buying emerges at a higher level than before and takes the price higher again. Most recent one I came across is of BILT. Chart enclosed for reference.

Ascending triangle is very easy to spot. They are considered bullish patterns are very reliable when found in an up trend.

At some point the price breaks the resistance and is propelled to much higher levels on renewed buying interest. In other word the price “breaks out” of the ascending triangle and moves upwards. Also note that normally the volume contracts during the ascending triangle pattern and when the breakout happens volume increases. The volume increase is considered as a confirmation of breakout. You can have a look at the price breaking out the ascending triangle and the corresponding increase in volume in the enclosed chart of BILT. The concept of breakout has been discussed extensively in a separate thread with excellent posts by Amit, Saint and Ajay. Please refer this tread for more details.http://www.traderji.com/showthread.php?t=3392

So ascending triangle present good buying opportunities during the breakout. So one has to look for the breakout with good increase in volume. The price should close higher than the resistance line (top horizontal line) with increased volumes.

The reverse of the ascending triangles is the descending triangles, which are bearish patterns that breakout out in the down side. These can be noticed by their horizontal support lines and descending trend line at the top.

Regards

karthik
Great stuff,Karthik..........very nice!!

Saint
Reply With Quote
  #10  
Old 18th September 2005, 06:39 PM
Member
 
Join Date: Jul 2004
Posts: 8,787
Thanks: 1,145
Thanked 13,324 Times in 2,392 Posts
Saint has a reputation beyond reputeSaint has a reputation beyond reputeSaint has a reputation beyond reputeSaint has a reputation beyond repute
Saint has a reputation beyond reputeSaint has a reputation beyond reputeSaint has a reputation beyond reputeSaint has a reputation beyond reputeSaint has a reputation beyond reputeSaint has a reputation beyond reputeSaint has a reputation beyond reputeSaint has a reputation beyond reputeSaint has a reputation beyond reputeSaint has a reputation beyond repute
Default Re: Ascending Triangle

Quote:
Originally Posted by roneeth
Hello !

Just to Add on to Karthiks Explanation...Some bits from my Notes

The ascending triangle is a bullish formation that usually forms during an uptrend as a continuation pattern.They are bullish patterns that indicate accumulation.They are also called as Right Angle Triangle.Two or more equal highs form a horizontal line at the top. Two or more rising troughs form an ascending trend line that converges on the horizontal line as it rises. If both lines were extended right, the ascending trend line could act as the hypotenuse of a right triangle. If a perpendicular line were drawn extending down from the left end of the horizontal line, a right triangle would form.


Top Horizontal Line: At least 2 reaction highs are required to form the top horizontal line. The highs do not have to be exact, but should be within reasonable proximity of each other. There should be some distance between the highs, and a reaction low between them.

Lower Ascending Trend line: At least two reaction lows are required to form the lower ascending trend line. These reaction lows should be successively higher and there should be some distance between the lows. If a more recent reaction low is equal to or less than the previous reaction low, then the ascending triangle is not valid.

Duration: The length of the pattern can range from a few weeks to many months with the average pattern lasting from 1-3 months.

Volume: As the pattern develops, volume usually contracts. When the upside breakout occurs, there should be an expansion of volume to confirm the breakout. While volume confirmation is preferred, it is not always necessary.

Return to Breakout: A basic of technical is that resistance turns into support and vice versa. When the horizontal resistance line of the ascending triangle is broken, it turns into support. Sometimes there will be a return to this support level before the move begins in earnest.

Target: Once the breakout has occurred, the price projection is found by measuring the widest distance of the pattern and applying it to the resistance breakout.

I hope this will be helpful.

Regards

Roneeth
Very nice Roneeth.........

Saint


Reply With Quote
Reply

Bookmarks


Advertise Here


Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads for: Ascending Triangle
Thread Thread Starter Forum Replies Last Post
Trading the Descending Triangle in BSE Sensex Traderji Technical Analysis 3 23rd April 2011 10:54 PM
Difference between a symmetrical triangle, Penant and Wedge. sh50 Technical Analysis 5 29th July 2008 01:10 PM
TELEDATA : Ascending Triangle? mdraafi Equities 3 29th July 2005 07:25 PM
Zee TV - Contracting for a Breakout! Traderji Equities 20 25th October 2004 08:32 PM
Jain Irrigation - Mid Cap Stock Pick TradersEdge Equities 2 5th October 2004 02:13 PM


All times are GMT +5.5. The time now is 11:15 AM.

Indemnity, Disclaimer & Disclosure Notice:
• By visiting Traderji.com you automatically indicate that you agree to our Forum Rules, Indemnity, Disclaimer & Disclosure Notice and General Content Disclaimer Notice and indemnify Traderji.com, its associates and related parties of all claims howsoever resulting from the usage of the forum/site.
Disclaimer: Trading or investing in stocks & commodities is a high risk activity. Any action you choose to take in the markets is totally your own responsibility. You are recommended to make appropriate enquiries and seek appropriate advise before sending money, incurring any expenses, acting on recommendations or entering into any commitment in relation to any advertisement published here. Traderji.com does not vouch for any claims made by the advertisers of products and services. Traderji.com will not be held liable for any consequences in the event such claims are not honoured by the advertisers. Traderji.com will not be liable for any, direct or indirect, consequential or incidental damages or loss arising out of the use of any information by anybody mentioned anywhere on this site.
Disclosure: The information in this forum is neither an offer to sell nor solicitation to buy any of the securities mentioned herein. The writers may or may not be trading in the securities mentioned.
• All names or products mentioned are trademarks or registered trademarks of their respective owners.
General Content Disclaimer Notice:
In light of our policy of encouraging candid, open exchanges of views and the rapid distribution of information originating from many sources, Traderji.com cannot determine the accuracy or legality of any information that may be uploaded to the forum. Opinions, advice and all other information expressed by participants in discussions are those of the author. You rely on such information at your own risk. You are urged to seek professional advice for specific, individual situations and not rely solely on advice or opinions given in the discussions. Since Traderji.com is an open and free discussion forum, any comments made by members of this forum in their posts reflect their own views and not of the owner or administrator of Traderji.com. Thus the owner/administrator indemnify themselves of all claims whatsoever and will not be liable or responsible for any members comments/views in this forum Traderji.com. Although we constantly delete all irrelevant content and/or SPAM, if you should find any objectionable or offensive posts made by members of this forum which you would like to bring to our notice for removal then please Contact Us.
 


Copyright © www.Traderji.com 2001 - , All rights reserved.

Recommended Websites - www.TradersEdgeIndia.com - www.TradingPicks.com - www.MasterOfTrading.com

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 167 168 169 170 171 172 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 192 193 194 195 196 197 198 199 200 201 202 203 204 205 206 207 208 209 210 211 212 213 214 215 216 217 218 219 220 221 222 223 224 225 226 227 228 229 230 231 232 233 234 235 236 237 238 239 240 241 242 243