Descending Triangle / Descending Triangle
Reference values based on Bulkowski's "Encyclopedia of Chart Patterns". Data is primarily from U.S. markets and may differ for other markets.
A triangle pattern formed by a horizontal lower support line and a declining upper resistance line. It indicates that sellers are gradually gaining dominance, and a downward breakout through the support line confirms the continuation of a downtrend. While it most commonly appears during downtrends, it can also function as a reversal pattern when appearing during uptrends.
Enter short when price clearly breaks below the lower support line on a closing basis. Volume increase at breakout is desirable.
Project the widest part of the triangle (from the first support touch to the first high) downward from the breakout point to determine the price target.
Place a stop-loss slightly above the most recent high within the triangle (the last upper resistance line touch point).
Volume should gradually decrease during formation and increase at the downward breakout. However, downward breakouts can be valid even without a volume increase.