Term: ASCENDING FORMATION

A formation, which is part of an uptrend, where the share price forms a triangle bounded by a horizontal resistance line at the top and characterised by a pattern of rising bottoms. Consider the chart:

ascending formation

Ascending Formation

Here you can see that this share was already in a strong bull trend and the ascending formation represented a period where there was resistance at a specific level. Once the resistance was exhausted, the share’s price was able to make an upside breakout.

Usually, such formations break on the upside.

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