The ascending triangle pattern is similar to the symmetrical triangle except that its upper trend line is a horizontal resistance line. Ascending triangles are generally bullish in nature and are most reliable when they appear as a continuation pattern in an uptrend. In these patterns, buyers slightly outnumber sellers. The market becomes overbought and prices start to drop. However, buyers then re-enters the market and prices are driven back up to the recent high, where selling occurs once more. Buyers re-enter the market, but at a higher level than before. The result is a steady high at more or less the same level but series of higher lows. Prices eventually break through the resistance level where the high peaks were formed and are propelled even higher as new buying comes in and volume increases.
An entry signal is given when the price breaks out of the ascending triangle to the upside. This should occur about 66% into the triangle. If the price breakout occurs near the apex of the triangle, it is not valid entry signal as these breakouts tend to lack momentum and have a higher tendency to fail.
A price projection of the ascending triangle can be calculated by taking the widest part of the triangle and adding it to the breakout point. Alternatively, a trend line can be drawn parallel to the resistance trend line which slopes in the direction of the breakout, with the extension being the target price for the move.