What Is a Descending Triangle Chart Pattern?
A descending triangle is a powerful technical analysis pattern with a predictive accuracy of 87%. The pattern is flexible and can break out up or down, and is a continuation or a reversal pattern.
A descending triangle has one declining trendline that connects a series of lower highs and a second horizontal trendline that connects a series of lows. A descending triangle can be bearish or bullish or a reversal or continuation pattern, depending on the direction of the price breakout.
A descending triangle occurring during a price uptrend, with a price breakout above the resistance line, is considered a bullish continuation pattern. (See chart below)
Conversely, a descending triangle occurring during a price downtrend, with the price breaking out above the resistance line, is considered a reversal pattern.
KEY POINTS
The descending triangle has a horizontal support line and a declining slope resistance line.
If the price breaks out of the triangle in the direction of the previous trend, it is a continuation pattern.
If the price breaks out of the triangle in the opposite direction of the previous trend, it is a reversal pattern.
A descending triangle is a powerful technical analysis pattern with a predictive accuracy of 87%. The pattern is flexible and can break out up or down, and is a continuation or a reversal pattern.
A descending triangle has one declining trendline that connects a series of lower highs and a second horizontal trendline that connects a series of lows. A descending triangle can be bearish or bullish or a reversal or continuation pattern, depending on the direction of the price breakout.
A descending triangle occurring during a price uptrend, with a price breakout above the resistance line, is considered a bullish continuation pattern. (See chart below)
Conversely, a descending triangle occurring during a price downtrend, with the price breaking out above the resistance line, is considered a reversal pattern.
KEY POINTS
The descending triangle has a horizontal support line and a declining slope resistance line.
If the price breaks out of the triangle in the direction of the previous trend, it is a continuation pattern.
If the price breaks out of the triangle in the opposite direction of the previous trend, it is a reversal pattern.