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Thomas N. Bulkowski’s successful investment activities allowed him to retire at age 36. He is an internationally known author and trader with almost 30 years of stock market experience and widely regarded as a leading expert on chart patterns. His four books, including the best selling Encyclopedia of Chart Patterns, have been translated into six languages. He may be reached at

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Bulkowski’s Reverse Symmetrical Triangle

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Market
Industrials (^DJI):
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As of 03/09/2010
10,564.38 11.86 0.1%
4,269.16 55.02 1.3%
376.41 -1.13 -0.3%
2,340.68 8.47 0.4%
1,140.44 1.94 0.2%
 
YTD
1.3%
4.1%
-5.4%
3.2%
2.3%
 
Tom’s Targets
10,700 by 04/01/2010
4,350 by 04/01/2010
380 by 03/15/2010
2,450 by 04/01/2010
1,150 by 03/15/2010
Mkt Overview: 03/05/2010
Mutt Losers: None YTD
Wilder RSI: 16.1%

CPI: on 02/09/2010

Written and copyright © 2008-2009 by Thomas N. Bulkowski. All rights reserved.

This page describes the reverse symmetrical triangle pattern of the Elliott wave principle, how price moves not in a straight line but in a series of rises and retracements.

 

The reverse symmetrical triangle in a bull market. The figure to the right shows what a reverse symmetrical triangle looks like in a bull market. The reverse symmetrical triangle is a region of horizontal price movement, a consolidation of a prior move, and it is composed of "threes." That means each of the A-B-C-D-E waves have three subwaves. I labeled the B subwaves with red numbers, 1, 2, and 3, as an example.

In a reverse symmetrical triangle, the shape of the pattern follows two diverging trendlines, shown here as red lines. A reverse symmetrical triangle is more commonly known as a broadening top or broadening bottom. According to Frost and Prechter, "There are no variations on the rarer expanding triangle," which is another name for the reverse symmetrical triangle. I have not looked for the 3-3-3-3-3 combination, but I do know that other broadening patterns exist. Check out: right-angled broadening top, ascending, right-angled broadening top, descending, broadening wedge, ascending, and broadening wedge, descending.

 

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The reverse symmetrical triangle in a bear market. A reverse symmetrical triangle in a bear market is an inverted picture of a bull market triangle. The price action swings from trendline to trendline, and diverges. The A-B-C-D-E waves subdivide into threes, forming a 3-3-3-3-3 configuration.

Rules

The reverse symmetrical triangle has rules that govern its shape. They are listed here.

  • The waves bottom and top out following two diverging trendlines.
  • Five waves compose the reverse symmetrical triangle (A-B-C-D-E).
  • Each of the A-B-C-D-E waves are composed of three subwaves, so it has a 3-3-3-3-3 configuration.

See Also

-- Thomas Bulkowski

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Copyright © 2008-2009 by Thomas N. Bulkowski. All rights reserved. Sure you can trust the government. Just ask a native American!