When price breaks outside of the pattern and if accompanied by increasing volume, there is a high probability that the future price will trend in the direction of the breakout. Ascending Triangles - A line connecting the peaks is horizontal while the line connecting the troughs rises and converges with the top line as a series of rising troughs meets resistance at the same level. Volume often remains moderate to low throughout the formation of the triangle with marked increases on the breakout. Descending Triangles - Troughs form a horizontal line while a series of falling peaks create a line that is a downward sloping resistance line. The indication is that supply becomes more aggressive as sellers lower their valuation perceptions.
Breakout is usually to the downside.
In the case of most triangles, the odds are that the trend leading into the triangle continues on the breakout of the triangle. It is not out of the question, when fundamental indecision and with no change in psychological setting in the market, for the market to continue in a sideways motion through the apex of an earlier triangle formation. Triangles are subject to many false moves and are among the least reliable of chart patterns. When a breakout occurs, the trend that results is expected to be in the direction of the breakout. Generally, it is a good idea to watch volume when a breakout occurs.