Supermax: A Case Study Of A Descending Triangle

About The Descending Triangle Pattern: The descending triangle pattern is a continuation chart pattern that develops in the middle of a downtrend. However, in some instances, this can play as a descending triangle reversal. Also known as the bullish descending triangle pattern.

The descending triangle stock pattern is a versatile chart pattern that is viewed as a continuation pattern and a reversal pattern at the same time.

The main features of the descending triangle pattern are:

  • A flat support line.
  • A descending trend line that connects a series of lower highs.
  • The flat support line and the descending trend line converge to a point.

Imagine that, at the top of the descending triangle chart pattern, there is a downtrend composed of a series of lower highs that are connected by a trend line slopping downwards. At the bottom, there is a solid floor of support that is tested at least 3-4 times. The support level is the bottom from where the price couldn’t push any lower.

descending-triangle-1-2.png

 

It’s important to remember that the descending triangle chart pattern is traditionally used to anticipate potential breakouts in the direction of the bearish trend.

Source: https://tradingstrategyguides.com/descending-triangle-pattern/

Supermax – a clear case of a descending triangle

Supermax19112019

With a support zone around $1.40-1.45, it continues to hover in a descending triangle pattern. Will it breakout towards the bearish direction or otherwise? It may have potential price objective of $0.50-0.75 upon its positive or negative breakout.

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