3SOF

Symmetrical triangles can be characterized as areas of indecision.  A market pauses and future direction is questioned.  Typically, the forces of supply and demand at that moment are considered nearly equal.  Attempts to push higher are quickly met by selling, while dips are seen as bargains. Each new lower top and higher bottom becomes more shallow than the last, taking on the shape of a sideways triangle.  (It's interesting to note that there is a tendency for volume to diminish during this period.)  Eventually, this indecision is met with resolve and usually explodes out of this formation (often on heavy volume.)  Research has shown that symmetrical triangles overwhelmingly resolve themselves in the direction of the trend.  With this in mind, symmetrical triangles in my opinion, are great patterns to use and should be traded as continuation patterns.


ONNN symmetrical $10.30 in play.

SPPI Symmetrical Triangle, below $8 in play

SIGA

Terliso,
I'd been admiring your analysis.
Those Magic lines are nice.
Ares

Symmetrical Triangle
The Symmetrical Triangle chart pattern is formed when a stock's highs and lows converge together to form a triangle shape. Therefore, the stock is having less and less price fluctuation. This is a stand off with the buyers and sellers. The Symmetrical Triangle pattern is considered a consolidation pattern.


As shown in the chart image above, a Symmetrical Triangle Pattern has formed. You can see the increasing inability for neither the buyers nor the sellers to control the price. When viewed with a candlestick chart you will also notice the candlesticks becoming shorter and shorter.

What Does the Symmetrical Triangle Pattern Signal?
Commonly, the Symmetrical Triangle Pattern is a strong signal of a pending breakout, meaning that eventually either the buyers or the sellers will win the battle. When the battle is finally won by the buyer then a bullish run is likely and when won by the sellers, a bearish price drop is likely.

Applying the Symmetrical Triangle Pattern
When planning an entry into a stock with the Symmetrical Triangle Pattern, a trader would place an order inline with a buy triggered from a breakout through the top line of the triangle and a sell triggered from a breakout below the bottom line of the triangle.