An ascending triangle forms when the price creates higher lows, but the highs remain flat at a resistance level. This pattern indicates that buyers are gradually gaining strength.
The resistance level acts as a ceiling for the price, while the upward-sloping trendline shows increasing demand.
Implication:
An ascending triangle is considered a bullish pattern, as it often indicates that buyers will eventually overpower sellers and cause a breakout above the resistance level.
Trading Strategy:
Entry Point: Place a buy order above the resistance level, anticipating a breakout.
Target: Measure the height of the triangle from the base to the resistance level and project it upward from the breakout point to determine the price target.
Stop Loss: A stop-loss can be placed just below the last higher low in case of a false breakout.
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