Posts Comments

Descending Triangle

DESCENDING TRIANGLES consolidate a trend, but not necessarily an uptrend or a downtrend. And the pattern’s resolution may be to resume the prevailing trend, or to reverse it. Regardless, the pattern holds a retest of its initial low, while interim highs are increasingly lower.

  1. Correcting
  2. Trending
  3. False break
  4. Breakout

 

 

A DESCENDING TRIANGLE that forms within the context of a uptrend is much more likely to resolve in new highs. A DESCENDING TRIANGLE that forms within the context of an uptrend will be vulnerable to a false break where a breakout would normally appear, but this risk diminishes greatly the longer that a failure is avoided.

Volume decreases throughout the DESCENDING TRIANGLE’s formation, and its pace increases sharply upon breaking out. The breakout is identified by a break under the lows, or above the pattern’s downtrending resistance.