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Strategies & Market Trends : MDA - Market Direction Analysis
SPY 687.57+0.7%Dec 10 4:00 PM EST
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To: Compadre who wrote (1050)12/13/1998 9:43:00 PM
From: TA Trader  Read Replies (1) of 99985
 
Jaime, maybe I can help you out a little. By definition, Ascending triangles are formed by correspondingly higher lows, meaning that buyers are coming in sooner on each pullback from an overhead supply area. Selling usually continues at or about that overhead supply area thus forming a rather flat lateral top. The key is that buying comes in sooner on each pullback and the selling comes in at the same level and NOT on declining highs as in a Symmetrical triangle. One can view an Ascending or right triangle as smart money accumulatng stock and eventually buying up all the overhead supply. An ideal ascending triangle breaks up through the supply line about 2/3 's through the formation on signifcantly increased volume. A point worth mentioning is that in most instances, after a quick move up, there is one final pullback and test of the breakout area in a relatively short period of time before moving substantially higher. Don't always bet on this, but if you miss the breakout and quick advance, don't chase as there will be some pullback after the sharp advance.
Symmetrical triangles by definition can break either way as the formation is being completed. Keep in mind that in a symetrical formation, you have both higher lows AND lower highs( sellers coming in earlier each time) Hope this helps.l
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