TRIANGLE

What Does Triangle Mean?

A technical analysis pattern created by drawing trendlines

along a price range that gets narrower over time because of
lower tops and higher bottoms. 

Technical analysts see a breakout of this triangular

pattern as either bullish (on a breakout above the
upper line) or bearish (on a breakout below the
lower line).
Symmetrical Patterns 
Symmetrical triangles are thought of as continuation patterns developed
in markets that are, for the most part, aimless in direction. The market
seems listless in its direction. The supply and demand therefore seem to be
one and the same.

During this period of indecision, the highs and

the lows seem to come together in the point
of the triangle with virtually no significant
volume. Investors just don't know what
position to take. However, when the investors
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times out of ten, the breakout will occur in the
direction of the existing trend.
 Ascending Triangle Pattern 
An uptrend is in place and the demand line, or lower trendline is drawn to
touch the base of the rising lows. The two highs have formed at the top
line. These highs do not have to have reach the same price point but should
be close to each other. 

Often a bullish chart pattern, the ascending triangle

pattern in an uptrend is not only easy to recognize
but is also a slam-dunk as a entry or exit signal.

 It should be noted that a recognized trend should

be in place for the triangle to be considered a
continuation pattern.

Most analysts will take a position once the price action breaks through the top line
of the triangle with increased volume, which is when the stock price should rise an
amount equivalent to the widest section of the triangle. 
Descending Triangle Pattern
The descending triangle pattern is the upside-down image of the
ascending triangle pattern. The two lows on the chart form the lower flat
line of the triangle and, again, have to be only close in price action rather
than exactly the same.

The descending triangle is recognized primarily in

downtrends and is often thought of as a bearish signal.

 The development of the descending triangle takes

the same amount of time as the ascending triangle,
and volume again plays an important role in the
breakout to the downside.
 Leonardo Fibonacci was an Italian mathematician born in the 12th century.
He is known to have discovered the "Fibonacci numbers," which are a
sequence of numbers where each successive number is the sum of the two
previous numbers. 

e.g. 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, etc. 

These numbers possess a number of interrelationships, such as the fact that

any given number is approximately 1.618 times the preceding number.

Fibonacci Numbers/Lines

Interpretation of the Fibonacci numbers in technical analysis anticipates changes

in trends as prices tend to be near lines created by the Fibonacci studies. The four
popular Fibonacci studies are arcs, fans, retracements, and time zones.
Fibonacci Extensions
Levels used in Fibonacci retracement to forecast areas of support or resistance.
Extensions consist of all levels drawn beyond the standard 100% level and are
used by many traders to determine areas where they will wish to take profits. The
most popular extension levels are 161.8%, 261.8% and 423.6%.

In practice, most traders use Fibonacci

extensions in combination with other
technical indicators/patterns to help
them determine appropriate target
prices. As this chart shows, the 161.8%
level is often used to set the price
target on a breakout of an ascending
triangle. This specific target is
calculated by multiplying the vertical
distance of the triangle by the key
Fibonacci ratio of 61.8% and then
adding the result to the upper
resistance of the triangle.