A symmetrical triangle is a consolidation formation, it can occur in both upward and downward trends. A symmetrical triangle means that the stock price moves sideways with successively higher bottoms and successively lower peaks, this forms a triangle pointing to the right.
A valid symmetrical triangle must have at least two peaks and at least two bottoms. A symmetrical triangle will have a decreasing volume during the formation. There is two trend lines for a symmetrical triangle, a positively sloped trend line along the bottoms and a downward-sloping trend line along the peaks.
The price target for a symmetrical triangle is calculated as the base of the triangle measured from the outbreak level. A buy signal is generated if the main trend is upward when the resistance level is crossed under increasing volume. A sell signal is generated if the main trend is downward when the support level is crossed under increasing volume.
