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# Chart Patterns

Module Units

## Ascending and Descending Triangles

Now that we have already understood the concept of triangles and covered what are symmetric triangle patterns earlier. In this section, we will discuss ascending and descending triangle chart patterns.

### What are Ascending Triangles:

This triangle appears during an upward trend and is regarded as a bullish continuation pattern. Sometimes it can also be formed at the end of a downward trend as a reversal pattern, but it is more commonly considered as a continuation chart pattern. Ascending triangles are mostly regarded as bullish patterns whenever they are formed in the charts.

### How to interpret this pattern?

In the ascending triangle, the upper trend line is flat and the bottom trend line rises above. As the prices trend above with peaks and troughs, prices face resistance and there is temporary reversal. Each of the troughs forms at the higher levels. The formation of this triangle occurs when the prices close above the resistance level along the peaks. The prior uptrend continues when the price breaks the resistance. Volume is low during the formation of the pattern.

Example:

Below is an example of Ascending Triangle formed in daily chart of Birlasoft ltd:

### Price target and Stop-loss:

The stop loss can be placed just at the breakout level of the triangle. For setting up the profit target, traders can measure triangle height at maximum width and then adjust that measurement according to the breakout price.

Ascending triangle mostly appears in an uptrend and is considered a continuation pattern. They are very rarely found at the downtrend,

### What are Descending Triangles?

Just like the ascending triangle this is also a continuation chart pattern. The only difference is that it is a bearish continuation pattern and it is formed during the downtrend. Sometimes it can be also created at the end of an uptrend as a reversal pattern, but it is more commonly considered as a continuation chart pattern.

### How to interpret this pattern?

Descending Triangles are opposite of Ascending Triangles. It is formed in the downtrend and indicates that the bears are aggressive. It has a falling upper line along the peaks and has a flat lower line along with the troughs. It signals the continuation of the downtrend with at least two or more peaks and two or more troughs. A close below the lower trend line with volume confirms the breakdown. Volume is usually low during the formation of the pattern.

Example:

Below is an example of a Descending Triangle formed on the daily price chart of SBI:

### Price target and Stop-loss:

The price target for this pattern should be set by subtracting the entry price and the vertical height between the two trend lines at the breakdown. One can set a stop loss at the upper trend line.

Descending triangle mostly appears in the downtrend and is considered a continuation pattern. They are very rarely found at the uptrend.

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