INDU: ascending triangle pattern. Break out suggests target at 2x extension of Major 1.

It looks like the INDU is setting up for an ascending triangle pattern. The break out target of an ascending triangle is measured as the max width of the triangle added to the break out level. I’ve show those as the purple lines. As you can see, a breakout suggest a target to exactly the 2.0x extension of Major 1, ~17,875, which is the classic/ text book target for a major 5. Given that the market is now most likely in major 5, that would make a lot of sense, doesn’t it. Of course, no guarantees, but the coincidence and target is there IF it breaks out (on higher than the longer term average volume).

INDU update 05112014

 

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4 thoughts on “INDU: ascending triangle pattern. Break out suggests target at 2x extension of Major 1.

  1. Soul is right.
    Ascending triangles are bullish accumulation patterns (break up) that indicate accumulation.
    Descending triangles are the bearish ones (break down).

    • hi monte! thanks and welcome. yes, it’s up to us as traders to recognize the correct pattern that develops. I think this was a case of confusing an ending diagonal with an ascending triangle. The former is terminal (with higher highs and higher lows) the latter is a continuation (same highs and higher lows, until break out above that same high). Seems like today may in fact confirm the ascending triangle formation.

      GL!!

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