Welcome to Bravechart. Your in-depth article on chart analysis from a Scotsman stationed in the Outback.
Descending Triangle Pattern on Woolworths Group Limited (WOW)
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 Descending Triangle.
Appearance: A Descending Triangle pattern is comprised of:
- A down trending stock that has lower peaks and troughs.
- A support level where the stock is channeling towards.
- Both trend lines create a triangle forming in the bottom right of your chart.
Important Note: Be aware, this pattern will not be confirmed until the share price breaks through the support level and continues the downtrend.
Example: Woolworths Group Limited (WOW)
Woolworths has been on a midterm downtrend ever since bouncing off resistance at $31.50. With the downtrend forming lower peaks and lower troughs, it look to be that WOW will start falling further and start to test the support level at $27.15. As the stock has continued to do this, should it break the support level at $27.15, it will look strongly bearish and probably head back to $26.15.
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