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Take Your Charts to the Next Level with This Bullish Pattern

It looks like the bulls got some much needed rest over the holiday-extended weekend, as the futures markets are pointing to a higher open today.

This follows the “upside reversal day” we saw last Thursday, so hopefully the bulls can maintain their strength throughout the week.

They started off strong last Friday but gave up all of their gains into the close, so it’s still anyone’s guess who is in charge.

But while we wait patiently to find out, let’s cover another technical pattern that often gets overlooked by traders…

Ascend to the Next Level

Today, we’re going to cover the “Ascending Triangle” pattern, which is a bullish chart pattern.

This is typically a continuation pattern, meaning that the breakout from the pattern is usually in the same direction as the prior trend.

You might actually recognize this pattern, as I use it fairly often here in Stock Surge Daily, although I don’t usually call it out by name.

For example, I had the United States Oil Fund, LP (USO) on the Watchlist back in May. At the time, the chart looked like this…

Daily Chart of United States Oil Fund, LP (USO) — Source: TradingView

Notice the horizontal upper boundary and the shallowing pullbacks from left to right…

As regular readers know, this is one of my favorite setups that I often bring to you when I see it.

But now, let’s add another ascending line across the lows on the chart…

Daily Chart of United States Oil Fund, LP (USO) — Source: TradingView

By adding the lower boundary on the original chart, you can see that we now have ourselves an ascending triangle pattern.

That includes the horizontal upper boundary (a staple of my technical analysis) as well as a rising lower boundary, which is what makes this an “ascending” triangle pattern.

In this example, USO eventually broke out from the pattern by about 10% and continued the previous trend for a while before rolling over.

All Shapes & Sizes

Triangle patterns come in a wide variety of shapes and sizes, and we’ll cover other variations in future updates.

But the key takeaway from the ascending triangle is the “ascending” part…

When you see pullbacks getting shallower as price moves from left to right, it is a sign that less supply is coming to market.

And if less supply is coming to market, an increase in demand is much more likely to trigger a substantial move higher in the price.

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Embrace the surge,

Ross Givens
Editor, Stock Surge Daily

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