7 Ways to Tell a Stock Is Headed Down

Learn how to spot bearish chart patterns

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Bearish Symmetrical Continuation Triangle

symmetrical triangle bearish 7 Ways to Tell a Stock Is Headed Down

A bearish symmetrical continuation triangle shows two converging trendlines, the lower one is ascending, the upper one is descending. The formation occurs because prices are reaching both lower highs and higher lows. The pattern will display two highs touching the upper (descending) trendline and two lows touching the lower (ascending) trendline.

This pattern is confirmed when the price breaks out of the triangle formation to close below the lower (ascending) trendline. Volume is an important factor to consider.

Typically, volume follows a reliable pattern. Volume should diminish as the price swings back and forth between an increasingly narrow range of highs and lows. However, when the breakout occurs, there should be a noticeable increase in volume. If this volume picture is not clear, investors should be cautious about decisions based on this triangle.


Article printed from InvestorPlace Media, http://investorplace.com/2012/10/7-ways-to-tell-a-stock-is-headed-down/.

©2014 InvestorPlace Media, LLC

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