Symmetric triangles

Apart from channels, it is important to notice that trend line associations are not necessarily parallel. It is possible to have other significant figures appear, the most common being triangles. These do not constitute trend figures, but consolidation ones.


Symmetric triangle figures (cf. graph below) are the most frequently used. They are formed by a downward resistance line and an upward support line. The spot price thus comes bumping against the upper line and landing on the lower line, in smaller and smaller moves due to the crossing of both trend lines. The more often the price comes on both lines, the more valid the figure is (the minimum being of course two impacts so as to determine the lines orientation)

.This figure is quite common in the case of long term trends. That is, the exit direction when the figure is broken is in the continuation of the entry direction. This exit normally occurs before the top of the triangle, usually near three quarters of its length (measured from the impact on the second trend line). The form of the figure itself, getting narrower, explains that the power “accumulated” by the stock suddenly appears at the end of the figure, the share moving considerably, often with much higher volumes.

With this formation too, it is possible to determine targets. Indeed, it is often standing, in the case of an upward consolidation, on the parallel line to the support line going through the first impact point (resistance line). Another target corresponds to the triangle height used at the exit point. In both cases, this level has to be reached before the date corresponding to the top of the triangle (cf. graph)