An ascending triangle is a bullish pattern. We can recognize the pattern by the shape that is created by two tredlines that form the triangle. In general, ascending triangles are bullish patterns that indicate that the asset is being accumulated.

The Trendlines

In the ascending triangle, a horizontal trendline is drawn horizontally connecting two or more approximately equal highs. There should be some distance between the candlesticks used for the highs and a low should be between them.

A second, ascending line is drawn connecting two or more candle stick lows with some space between the ascending lows.

When the price of the asset breaks above the top resistance, it is generally a good time to enter into a long position.

Looking at the chart below, you can see the trangle that is forms by the horizontal highs with the lows in between and the ascending lows. Consecutively ascending lows form the bottom ascending line of the triangle.

Volume

Volume: As the ascending trianlge pattern develops, look for volume to contract. Once the breakout upwards begins, we should see a volume increase that will confirm that a breakout is occuring. This confirmation is not always necessary but is preferred.

Target

Once the breakout occurs, we can project the target by measuring the height of the triangl. Looking at arrows 5 and 6 in the chart below, we can use the height of the traingle (5) to get the height of the breakout (6).

Returning to the Breakout

In technical analysis it is common that resistance turns into support and vice versa. In the ascending trianlge pattern the horizontal resistance line turns into the support level when the horizontal resistance line of the ascending triangle is broken. Sometimes there will be a return to this support level before the move begins.

Other Notes

Bollinger Band Width (BBW): We can see in the BBW chart that the band widths are narrowing (2). This is a bullish sign.

MACD (Moving Average Convergence Divergence): We can see that the MACD line crosses above the signal line (3). This is a bullish sign.

Stoch RSI: The RSI is low and the blue line is crossing above the orange line (4). This indicates that trend is going from oversold to overbought. This can be a bullish sign.

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