Symmetric triangles

Apart from channels, it is important to notice that trend
line associations are not necessarily parallel. It is possible to have other
significant figures appear, the most common being triangles. These do not
constitute trend figures, but consolidation ones.

Symmetric triangle figures (cf. graph below) are the most
frequently used. They are formed by a downward resistance line and an
upward support line. The spot price thus comes bumping against the upper
line and landing on the lower line, in smaller and smaller moves due to the
crossing of both trend lines. The more often the price comes on both lines, the
more valid the figure is (the minimum being of course two impacts so as to
determine the lines orientation).

This figure is quite common in the case of long term
trends. That is, the exit direction when the figure is broken is in
the continuation of the entry direction. This exit normally occurs before
the top of the triangle, usually near three quarters of its length
(measured from the impact on the second trend line). The form of the figure
itself, getting narrower, explains that the power “accumulated” by the stock
suddenly appears at the end of the figure, the share moving considerably, often
with much higher volumes.

With this formation too, it is possible to determine
targets. Indeed, it is often standing, in the case of an upward
consolidation, on the parallel line to the support line going through the first
impact point (resistance line). Another target corresponds to the triangle
height used at the exit point. In both cases, this level has to be reached
before the date corresponding to the top of the triangle (cf. graph)