Chart Analysis and Chart Pattern Recognition – Descending Triangle Pattern
triangle is a variation of a symmetrical triangle formation that has a flat support line and
a falling resistance line. The lower highs indicate the decreasing demand and
give the descending triangle definitive bearish bias. The descending triangle
usually represents a distribution stage in bearish market. The descending
triangle is considered as a continuation pattern, especially in a downtrend, but it
may also mark a reversal in an uptrend. Volume usually increases on trend support resistance breakout.
After breakout (similar to rectangle), support may turn into potential
resistance and vice versa.
Descending Triangle Screening page presents a list of stocks forming Descending Triangle Pattern.
# 1 As a continuation pattern, descending triangle usually appears within
a young trend, characterized by neutral long-term indicators and oversold
short-term indicators. Descending triangle resets short-term indicators to
neutral and then continues the movement in parent's direction.
# 2 As a reversal formation, descending triangle appears in a mature uptrend,
characterized by overbought long-term and short-term indicators. This situation
usually generates bearish divergence on long-term indicators.
# 3 For the best results, chart patterns should be considered together with other technical analysis signals and technical trading techniques.
Estimated Target: the main trend support/resistance level. line.
Stock Chart Patterns.
The price chart is the result of the activity of all market
participants. It reflects periods of high expectations,
greed and fear. As with most emotional human activities, it
presents different patterns. Chart analysis and pattern recognition provide
useful information for technical analysis, trend analysis, and market
timing signals for technical trading.
Trendlines and chart patterns can be analyzed in different time
frames: from intraday, daily and weekly frames, up to
multi-year patterns. It is the best practice to
analyze patterns in conjunction with other technical
Each price pattern is formed by several smaller sub
waves. At least 3 – 4 subwaves are required to perform
a reliable pattern screening. We use a minimal required number of sub
waves for an earlier pattern recognition screener. On the other
hand, a pattern formed with more subwaves is more