A chart pattern representing congestion with higher lows and lower highs forming the shape of a triangle
A triangle pattern represents a period of of narrowing volatility. It might reflect the indecision of the market to choose a direction. Thus, a break out from the triangle is seen as a signal for that direction.
A conservative projection looks for the breakout to return to the highest point of the triangle in a bullish breakout, and the lowest point of the triangle in a bearish breakout. Another breakout target takes the width of the triangle and projects that into the direction of the breakout.
There are basically 4 types of triangle patterns technical analysts look at: Ascending, Descending, Symmetrical, and Diagonal.
