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Trading Symmetric Triangles
Although some of the more well know chart patterns to
trade off of include the Cup and Handle, Double Bottom
and Flat Base another chart pattern to look for is the
Symmetric Triangle.
The Symmetric Triangle pattern usually occurs after a
stock makes a significant move over a short period of
time and then pulls back for a few weeks before making
another significant move upward. The weekly chart of
OMNI below shows that it made a quick move in early
November of 2003 and then developed a Symmetric
Triangle. OMNI then broke out again in the early part
of December and doubled in price over the next four
weeks.
Another example is shown by RADN which
formed two separate Symmetric Triangle patterns in
November and December of 2003 before moving higher.
Thus recognizing those stocks which are forming a
Symmetric Triangle pattern can lead to substantial gains
if they break out to the upside.
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