asc triangle

Ascending Triangle

Strategies

Long Stock

Covered Calls

Long Calls

Short Puts

Bull Call Spreads

Bull Put Spreads

Diagonal Call

Calendar Spread

Trade Setup Always Criteria Top Down Approach: Market is STRONG and/or Stock

is in a STRONG area (sector/industry group) of the

market Uptrend: Stock has recently made a new swing high Price Relative indicator is positive From new swing high, stock trades sideways

(consolidates) in a narrow range with relatively equal

highs and ascending lows (pinching together from

below). This consolidation should bring the price back

into one of the following:

Lower Trendline

20 Day SMA

50 Day SMA

Prior Support/Resistance Level Consolidation lasts a minimum of 5 days (and often

much more) Minimum 300,000 shares of average daily volume Volume often tapers during consolidation- watch for low

volume as a clue to when stock is nearing a break out Reward to Risk ratio: minimum 2:1

No earnings date in the next 10 trading days (DO NOT

hold through earnings!) or pending news in near-term

Trade Trigger: Stock Breaks High of

Consolidation (or a

recent group of

relatively equal highs)

Entry Order: Buy Stop Limit- for

Controlled Entry

GTC Order (usually)

Stop: Trigger Price

(from above)

Limit: 10-20 cents

above stop

Initial Stop Loss

Order: Sell Stop (Mkt) below

last mini-swing low or

1 ATR below entry

GTC

Reward/Risk Exercise

Target

Entry

Stop

Reward

Risk

R/R Ratio