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
Thus recognizing those stocks which are forming a Symmetric Triangle pattern
can lead to substantial gains if they break out to the upside.