As of 10/07/2024
  Indus: 41,954 -398.51 -0.9%  
  Trans: 15,783 -31.37 -0.2%  
  Utils: 1,027 -24.05 -2.3%  
  Nasdaq: 17,924 -213.95 -1.2%  
  S&P 500: 5,696 -55.13 -1.0%  
YTD
 +11.3%  
-0.7%  
 +16.5%  
 +19.4%  
 +19.4%  
  Targets    Overview: 09/30/2024  
  Up arrow43,500 or 41,600 by 10/15/2024
  Up arrow16,800 or 15,700 by 10/15/2024
  Up arrow1,125 or 1,025 by 10/15/2024
  Up arrow19,000 or 17,600 by 10/15/2024
  Up arrow5,900 or 5,600 by 10/15/2024
As of 10/07/2024
  Indus: 41,954 -398.51 -0.9%  
  Trans: 15,783 -31.37 -0.2%  
  Utils: 1,027 -24.05 -2.3%  
  Nasdaq: 17,924 -213.95 -1.2%  
  S&P 500: 5,696 -55.13 -1.0%  
YTD
 +11.3%  
-0.7%  
 +16.5%  
 +19.4%  
 +19.4%  
  Targets    Overview: 09/30/2024  
  Up arrow43,500 or 41,600 by 10/15/2024
  Up arrow16,800 or 15,700 by 10/15/2024
  Up arrow1,125 or 1,025 by 10/15/2024
  Up arrow19,000 or 17,600 by 10/15/2024
  Up arrow5,900 or 5,600 by 10/15/2024

Bulkowski on Ascending Triangles

Trading lessons added 6/14/24.

For more information on this pattern, read Encyclopedia of Chart Patterns, 3rd Edition. If you click on the link and then buy the book (or anything) during the visit at Amazon.com, the referral will help support this site. Thanks.

-- Tom Bulkowski

$ $ $

Overview
Important Results
Identification Guidelines
Trading Tips
Example
Other Examples
Trading Lessons
See Also

 

Shown is an ascending triangle chart pattern

Ascending Triangle

Ascending Triangle: Overview

The ascending triangle is a decent performer after an upward breakout but suffers after a downward breakout.

Click ascending triangle to read about the Elliott wave version.

Ascending Triangle: Important Bull Market Results

Overall performance rank for up/down breakouts (1 is best): 16 out of 39/30 out of 36
Break even failure rate for up/down breakouts: 17%/38%
Average rise/decline: 43%/13%
Throwback/pullback rate: 64%/63%
Percentage meeting price target for up/down breakouts: 70%/44%

The above numbers are based on more than 1,400 perfect trades. See the glossary for definitions.

Ascending Triangle: Identification Guidelines

CharacteristicDiscussion
Price trendCan be any direction leading to the chart pattern.
ShapeTriangular. Prices move between two converging trendlines.
TrendlinesTwo trendlines bound prices; the top trendline is horizontal and the bottom one slopes upward.
CrossingPrice must cross the pattern from side to side, filling the triangle with price movement, not white space.
TouchesPrice must touch one trendline at least three times, the other at least twice, forming distinct valleys and peaks.
VolumeTrends downward at least 78% of the time.
BreakoutUpward 63% of the time and 64% of the way to the triangle apex (for both breakout directions).

Top of page More

Ascending Triangle: Trading Tips

Consult the figure on the right.

Trading TacticExplanation Ascending triangle measure rule
The Measure Rule
Measure ruleCompute the height from the price of the horizontal trendline (B) to the lowest valley in the pattern (A) and then multiply it by the above 'percentage meeting price target.' Add it (upward breakouts) or subtract it (downward breakouts) from the breakout price. The breakout price is the point at which price pierces the trendline. The associated link provides more information.
StopPlace a stop loss order on the side opposite the breakout unless that would be too far away. Click the link on the left for stop placement information. For example, if the breakout is upward, a stop at any of the minor lows on side A would work well. For downward breakouts, use the price of B as the stop price.
RisePatterns with a intermediate-term rise (between 3 and 6 months) leading to the triangle show price rising an average of 49% after an upward breakout.
Score your chart pattern for
performance by clicking here
Throwback and PullbacksThrowbacks and pullbacks hurt post breakout performance. The links on the left define terms. For performance information on throwbacks and pullbacks, click the associated link.

Top of page More

Expect the market to turn when it reaches the apex of the triangle. See Triangle Apex and Turning Points.

 

Ascending triangle chart pattern example

Ascending Triangle: Example

The figure shows an example of an ascending triangle. Price bounces between two converging trendlines, the top one is horizontal and the bottom one slopes upward.

To calculate a price target, subtract the price of the lowest valley in the chart pattern (A) from the price of the top trendline (B). That gives the height. Multiply the height by the 'percentage meeting price target' from the Important Bull Market Results table near the top of this page, and add it to the price of the top trendline B. In this example, point C makes for a good stop location.

For downward breakouts, compute the height in the same manner only subtract the height from C.

Top of page More

Other Ascending Triangle Examples

Ascending Triangles: Trading Lessons

I present the information in slider format, so be sure to click the left or right arrows to view another slide.

Lessons Summary

 

1 / 4
Chart of ALL

This chart shows the stock breaking out of the triangle downward (blue dot), reversing, and shooting out the top of the triangle, busting the downward breakout. Almost half (46%) of ascending triangles with downward breakouts will bust (move higher), rising an average of 36% (to the ultimate high). Most (67%) of the busts are single ones (a move down followed by a move higher), so the chance of additional up-down cycles is less.

Next chart please.
2 / 4
Chart of AMN

Here's another example of a busted ascending triangle. The breakout is downward, the stock reverses course, and rises to a big gain.

Next chart please.
3 / 4
Chart of EXPD

I had to hunt through a lot of ascending triangle charts to find a picture of a multi-peak/ascending triangle combination. Multi-peak patterns are bearish. Any bullish pattern may breakout upward but the rise often fails without price rising far. In this case, the breakout is downward from the triangle, the pattern busts (which is bullish), but the rise after the bust is tiny (to the green dot, which is the ultimate high). The stock tumbles thereafter.

Next chart please.
4 / 4
Chart of HNI

The chart says it all. Traders had two days to sell.

The end.

-- Thomas Bulkowski

See Also

Top of page

 

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