Ascending Triangle

Ascending Triangle is a chart pattern, characterized by horizontal top and rising bottom. This is created when a bullish market pushes up against a resistance level.

Pattern Formation
When a strong market hits against a resistance, it retreats back and tries to push through the resistance, two or more number of times. As it does this it forms equal swing tops and higher high swing bottoms, which speaks about the bullishness of the market. When the swing tops and swing bottoms are joined with the trend lines, we get this characteristic pattern. Because of its strength, It finally breaks out of the resistance level to give us a long trade.

Study the charts given below.

The target for this trade is a level equal to the height of the base of the triangle, from the break out point.

Variation
This pattern usually occurs in an up trend and thus is a continuation pattern. But rarely it can also occur in a down trend when the prices falls below a support level and then the demand increases more than the supply. Now it acts as a reversal pattern.

Occasionally the prices fails to push up the resistance level that is at the horizontal base of the triangle and thus breaks down.

Compare this with descending triangle, symmetrical triangle.

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