naga2054 said:
Great Explanation Amit. These TechBits make us ascend towards the orbit of TA.. ,
Was trying to collatethe knowledge of Ascending triangle also..
for instance take the double bottom, where the 2nd bottom is higher than the 1st bottom - then it gets into an ascending triangle pattern where a breakout will be positive one ( am i true in saying so?)
going on the same lines in case of Double Top, where the 2nd Top is less than the first one - does it imply a descending triangle pattern where the breakout will be in the negative direction?
Please correct us..
Nagzu
Hi Nagzu,
Just an add to Amit's comments........To put it simply,a
symmetrical triangle is a neutral pattern,usually it continues the trend before the triangle formation......but the word usually is important.What we do is to wait for a breakout or breakdown and trade accordingly.
An
ascending triangle is usually a bullish formation......of course it could go the other way at times,which makes it exceptionally bearish.An ascending triangle at the bottom is still bullish,it is a sign of things about to change.As you said correctly,if the 2nd bottom is higher than the 1st bottom,now we have a higher pivot high+an asc triangle.....again a possible sign of better times.
A
descending triangle is usually bearish......you get to see it more often as the stock is in a downtrend.Can a stock make atop and then make a 2nd top lower than the 1st one,and then get into a descending triangle?Sure.As with the ascending triangle,this is a sign of caution....a signal of bad times to come for this stock.Again,descending triangles usually break down,but there are those instances where it gets nullified.....then it's doubly bullish.In the case you mentioned,a lower pivot high + a desc triangle at the top is asign of caution.....possible breakdown.
Happy Trading!
Saint
