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.
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.