Welcome to Bravechart. Your in-depth article on chart analysis from a Scotsman stationed in the Outback.
As traders, we use technical analysis as a reliable method for speculating on future price direction of both equities (shares) and indexes. Technical Analysis in simple terms is the study of historic price movements in a chart in search of patterns or consistently traded support and resistance levels. Today we are looking at a specific chart pattern that falls under continuation patterns, the Ascending Triangle.
Appearance: An Ascending Triangle pattern is comprised of:
- An up-trending stock that has higher peaks and troughs.
- A resistance level where the stock is channeling towards.
- Both trend lines create a triangle forming in the top right of your chart.
Important Note: Be aware, this pattern will not be confirmed until the share price breaks through the resistance level and continues the uptrend.
Example: Harvey Norman (HVN)
Harvey Norman has been charting in an uptrend for two months now and is starting to hit resistance once again. As you can see from the below chart, HVN is at the point the ascending triangle, and will decide to break to the upside or downside quite soon. With the share price bouncing off this resistance level three times now, we can also see that It is a level that investors clearly see as a sticking point. If the share price breaks out of the triangle, we would expect to see the share price continue in that direction for the next couple of days.
There are many ways that you could take advantage of these patterns. As a specialist in derivatives, we are able to profit on a stock when it falls as well as when it rises.
If you would like to learn how to pick a stocks direction, then Join us at our live face to face one day “Technical Analysis, Picking the Direction of a Stock” course.
Contact us today on 03 8080 5788.
Regards,
Benjamin Farkas
TradersCircle