About The Descending Triangle Pattern: The descending triangle pattern is a continuation chart pattern that develops in the middle of a downtrend. However, in some instances, this can play as a descending triangle reversal. Also known as the bullish descending triangle pattern.
The descending triangle stock pattern is a versatile chart pattern that is viewed as a continuation pattern and a reversal pattern at the same time.
The main features of the descending triangle pattern are:
- A flat support line.
- A descending trend line that connects a series of lower highs.
- The flat support line and the descending trend line converge to a point.
Imagine that, at the top of the descending triangle chart pattern, there is a downtrend composed of a series of lower highs that are connected by a trend line slopping downwards. At the bottom, there is a solid floor of support that is tested at least 3-4 times. The support level is the bottom from where the price couldn’t push any lower.
It’s important to remember that the descending triangle chart pattern is traditionally used to anticipate potential breakouts in the direction of the bearish trend.
Supermax – a clear case of a descending triangle
With a support zone around $1.40-1.45, it continues to hover in a descending triangle pattern. Will it breakout towards the bearish direction or otherwise? It may have potential price objective of $0.50-0.75 upon its positive or negative breakout.
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