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Profitable
Pattern Number Two
Ascending and Descending Triangles: The Traditional Bull
and Bear
When you notice
a stock has a series of increasing troughs and the price is
unable to break through a price barrier, chances are you are
witnessing the birth of an ascending triangle pattern.
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Ascending Triangle
Pattern
Confirm your ascending triangle pattern by drawing a
horizontal line tracing the upper price barrier and
a diagonal line tracing the series of ascending troughs. |
The descending triangle is the bearish counterpart
to the ascending triangle.
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Descending Triangle
Pattern
Confirm your descending triangle by drawing a horizontal
line tracing the lower price barrier and a diagonal
line tracing the series of descending troughs.
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The ascending and descending patterns indicate
a stock is increasing or decreasing in demand. The stock
meets a level of support or resistance (the horizontal trendline)
several times before breaking out and continuing in the
direction of the developing up or down pattern.
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How to Profit from
Ascending and Descending Triangles
Ascending and descending triangles are short-term
investor favorites, because the trends allow short-term
traders to earn from the same sharp price increase that
long-term investors have been waiting for. Rather than holding
on to a stock for months or years before you finally see
a big payday, you can buy and hold for only a period of
days and reap in the same monster returns as the long-time stock owners.
As with many of our favorite patterns, when
you learn to identify ascending and descending triangles,
you can profit from upwards
or downwards breakouts. That way, you’ll earn
a healthy profit regardless of where the market is going.
Watch For:
• An ascending or descending pattern
forming over three to four weeks.
Set Your Target Price:
For ascending and descending triangles, sell
your stock at a target price of:
• Entry price plus the pattern’s
height for an upward breakout.
• Entry price minus the pattern’s height for
a downward breakout.
ChartAdvisor Ascending and Descending Triangles in Action
Ascending and descending triangles are some
of our most popular patterns, because their features are so
clear and the breakouts are almost always fast and
furious.
Flanders Corp (FLDR) earned our readers 28%
in 18 days. Dominos Pizza (DPZ) jumped 12% in 20 days after
we pinpointed the breakout point on June 13, 2005.
Another of our winning picks in 2005, Dril-Quip
Inc (DRQ) jumped 12% in just 6 days. On Boyd Gaming (BYD),
investors following our pick earned a whopping 29%
in 35 days.
Our readers earned 29% in 35 days on
the BYD ascending triangle pattern.
As a ChartAdvisor regular you would have reaped incredible profits on the 60
ascending and descending triangle picks we’ve made since
our program’s beginning.
We features an average of two
of these cash cows per month, making them one of the most prevalent
and predictable patterns in your toolbox.
Learn How to Profit from our
Next Profitable Pattern:
The Head and Shoulders >
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