The Ascending Triangle Formation or pattern is formed when the price range between high and low prices narrows, thus creating a triangular shape. Its patented horizontal trendline linking the highs at almost the same level as well as an ascending trendline connecting higher and higher lows are the distinct characteristics of this pattern.
How Ascending Triangle Formation works
The ascending triangle yields a signal to traders to opt for a ‘buy’ when the price goes beyond the resistance line that is usually somewhere between halfway and three-quarters of the way through the pattern.
The Ascending Triangle pattern, the price is expected to go high to its target level, calculated using this formula
T = R + H
T – target price
R – resistance (horizontal line);
H – pattern’s height (distance between and resistance lines at the pattern’s origin).