Notices

Symmetrical triangle

From Traderpedia

Definition:
A sideways chart pattern between two converging trendlines in which the upper trendline is declining and the lower trendline is rising.


As you will probably assume from the name, a Symmetrical triangle is one where the consolidation happens from both the top and the bottom with fairly even buying and selling pressure. This pushes the stock or index into a smaller and smaller range from which the stock or index will erupt with a lot of force. This is sometimes referred to as the 'Pressure Cooker' syndrome, where the buying and selling pressure builds to such a point that the lid can no longer be kept on and the price movement suddenly errupts forth.

Image:SymTriangle.jpg

However do not be fooled into thinking that this is always a continuation pattern and the stock or index will resume its prior trend. A Symmetrical Triangle can also be Reversal pattern with the stock or index errupting the opposite way out of the triangle.