This post will explain what ascending triangles are in relation to technical analysis with stock charts, and then illustrate and explain to use them to trade stocks.
Ascending Triangle
When finding ascending triangles, what you are looking for is actually pretty straight forward and simple. Look first at the image below:
You can see the triangle form and how it is ascending, which is caused by lower lows as the stock moves sideways. If you imagine flipping the triangle over, you would then have a descending triangle. Ascending triangles overall are bullish patterns and can signal higher prices to come.
Let’s look at one in an actual stock chart. I used Ralph Lauren for this example:
Can you see the ascending triangle forming? For the pattern to be complete, the stock needs to now push back up towards $98. If we were looking at making a stock trade with this pattern, then we would want to place a stop order just above $98, which will automatically buy us in if when the stock breaks past this resistance.
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