9 Minute Read

Tackle Today: Theory of a Symmetrical Triangle

August 13, 2021

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Pressure pushing down on me


Consolidation patterns come in all shapes and sizes. Flags, retracements, pennants, triangles – you name it. The concept is simple. Stocks are like sprinters. They run, then they rest. Consolidation formations are the resting periods.

One such example that caught my eye on Thursday is the symmetrical triangle. There’s no mystery to the name. It describes precisely what the pattern looks like. It’s formed by a series of higher pivot lows and lower pivot highs. The higher lows are bullish and signify rising demand beneath the surface. On the flip side, the lower highs are bearish and suggest supply is increasing.

When you have bullish signs offset by bearish signs, it results in a stalemate of sorts. Because the trendlines pinch together, you eventually get resolution in one direction or the other.

You can look to the longer-term trend for clues as to who the eventual victor will be. If the symmetrical triangle forms in an uptrend, then bulls have the upper hand. The opposite is true for downtrends.


Chart of the Day

The Apple Triangle  

Tech kingpin Apple just completed a textbook symmetrical triangle with Thursday’s rally. The 2.08% gain made the stock one of the best performers on my watchlist and should set the stage for a breakout over $150.

Video of the day

Jedi Options

Coach Tyler uses the setup on Advanced Micro Devices $AMD to analyze a potential Bull Call Spread or Bull Put Spread in this clip from Wednesday’s Halftime Report

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