Bullish Triangle Pattern

There are 2 types of bullish triangle patterns – symmetrical and ascending as demonstrated in the following figures:

Type 1 – Bullish Symmetrical Triangle

1. A stock is in an uptrend

2. It forms a symmetrical triangle

3. It breaks out from the triangle and goes higher

Type 2 – Bullish Ascending Triangle

1. A stock is in an uptrend

2. It forms an ascending triangle

3. It breaks out from the triangle and goes higher

Let’s look at some examples:

The figure below shows ENTG formed a symmetrical triangle in May. Soon after that, the stock went from 2.0 and peaked at 3.4 with a percentage gain of over 70%.

Here’s another stock (FEED) that formed a symmetrical triangle in April.  The stock jumped from $2.5 a share to $8 in less than 3 months. That is a 220% gain in value.

Let’s look at a stock with an ascending triangle, TSL, which is a solar company I used to swing trade pretty often. The stock doubled in value from $14 a share to $28 in one month right after it formed an ascending triangle in May.

Bearish Triangle Pattern

There are 2 types of bearish triangle patterns- symmetrical and descending as demonstrated in the following figures:

Type 1 – Bearish Symmetrical Triangle

1. A stock is in an downtrend

2. It forms a symmetrical triangle

3. It breaks out from the triangle and goes lower

Type 2 – Bearish Descending Triangle

1. A stock is in an downtrend

2. It forms a descending triangle

3. It breaks out from the triangle and goes lower

Here’s an example of a descending triangle. The stock LGN formed a descending triangle pattern at the end of May. It was a declining stock and continued to drop when the pattern was forming. It declined another 20% in less than 2 weeks after the pattern was formed.

MORE ABOUT TRIANGLES