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Bullish Patterns
Symmetrical Triangles
Ascending Triangles
Rectangles
Pennants
Flags
Wedges
Head & Shoulder Bottom
Cup & Handle
Trendlines

Neutral Patterns
Symmetrical Triangles
Rectangles

Bearish Patterns
Symmetrical Triangles
Descending Triangles
Rectangles
Pennants
Flags
Wedges
Head & Shoulder Top
Trendlines

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Symmetrical Triangles

Bullish symmetrical triangles represent neutral periods of doubt and indecision. They are characterized by a series of higher lows and lower highs as the forces of supply and demand are nearly equal.Each rally is seen as a selling opportunity while each dip is met with buying. The pattern is typically large and takes several months or more than a year to form.

The best breakouts occur ½ to ¾ of the way through the pattern. A stock seems to gain energy as it is compressed into the triangle, but that energy dissipates beyond the ¾ point. It is recommended that traders abandon a stock that trades beyond the ¾ mark for very little movement is likely to occur. Volume typically diminishes as the pattern develops because traders become more and more unsure as to the stock's future direction. Then, seemingly without warning, the stock explodes out of the pattern.

Bullish symmetrical triangles appear in uptrends and typically resolve themselves to the upside. Breakouts to the upside must be accompanied by a significant increase in volume to confirm the breakout. Failure to accomplish this doesn't automatically render the play invalid, but it does raise a yellow flag. Besides volume, the astute trader ought to look for a close above the most recent high. This price represents the previous area of selling pressure and an area where stockholders may be looking to “get out even.” It is recommended that if volume does not accompany the break, and if the stock fails to make a higher high within a reasonable amount of time, the trader should move a sell stop up to protect profits.

The expected price movement upon breakout is approximately equal to the widest part of the pattern.




TEO formed a typically symmetrical triangle in an uptrend in the late winter months of '03. After steadily rallying on solid volume (notice the black volume bars are generally bigger than the red ones) the stock made a lower high and a couple higher lows as the stock was compressed by converging trendlines. Volume then surged on the mid-April breakout. Notice the widest part of the pattern (approx. 1.75 points) accurately predicted the move from 4.25 up to 6.0. Textbook play.



TRPS traded into a symmetrical triangle and broke out on massive volume. Notice the move from 10 to 20 into the pattern was pretty good at forecasting the move from 20 to 30 upon breakout.



BDY formed a solid symmetrical triangle pattern in the fall of '01 and provided a great move to the upside when the stock broke out. Notice the volume; it was huge on the rally into the pattern, and than it significantly fell off within the pattern.That's exactly what you want to see. Then volume surged again on the breakout. Textbook scenario.


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