Trading chart symmetrical triangle with a small price rise rich bank

the minor highs, whereas an up-sloping trend line on the bottom supports the minor lows.

The volume trend recedes although it is spiky in places. Price attempts to leave the formation in late June but gets sucked back in. It tries again and with higher volume shoots out the top of the triangle but quickly throws back, curls

around, and heads lower.

Why do symmetrical triangles form? Prices zoom up making higher. son succeeding days. days. Eventually, selling pressure quenches demand for highs the stock and prices turn down. Swing traders, sensing a change in trend, quickly sell their holdings, putting additional pressure on the stock. Prices fall to a level where prior support set up by a peak months earlier or various other factors entice investors to view the stock as a bargain. The price is shooting up, they reason, so why not join the trend, especially now that it is cheaper?

Such rationalizations increase demand and send the stock up again, but

this time the momentum players that missed a chance to sell earlier do so now.

Others, believing that there may not be enough upward momentum to carry

the stock to the old high, sell too. The selling pressure halts the price rise at alower level and turns it around.

Value investors seeing the stock drop, and since the fundamentals have not changed, buy it on the way down. Some add to their positions at a lower price and others buy it for the first time. The buying may force prices to move horizontally for a bit instead of straight down. Eventually, though, a higher low

forms not so much from anxious buyers, but from a dearth of sellers.