The ascending triangle pattern is a bullish formation with a horizontal line on top and a continually “ascending line” approaching it diagonally from below. That upward sloping line will find support at higher highs and trade begins to coil. One would place a stop above the top horizontal line, and many times like any other breakout it will not be uncommon for it to retest. Below are 3 examples of the continuation pattern.
In Friday 10/30 Game Plan we looked at DY. DY is now higher by 145% YTD and 231% over the last one year period. The stock has been on an amazing run down just 13 weeks since the week ending 2/6. During that run their were just 2 weeks of distribution ending 10/2 and 10/16 losing 6.8 and 3.9% respectively. Both those weeks did find support at an upward sloping 50 day SMA. DY inch past the triangle on 11/2 and it was retested on 11/6 and held firm, a very good sign. It reported after the close last night and as of this writing looks poised for a 5th consecutive well received earnings report. Below is how it was presented precisely in our daily report.
DY is a telecommunications play up 117% YTD and 164% over the last one year period. The stock has an excellent record with the last 4 earnings reactions leaping higher by more than 10%, up 11.1, 22.8, 17 and 14.6% on 8/26, 5/20, 2/25 and 11/25/14. Amazingly the stock has been down just 15 weeks in all of 2015. The round numbers have played a role with the 60 handle stubborn resistance until a break above a very tight 3 weekly CLOSING pattern between weeks ending 6/12-26 all finishing within .35 of each other. More recently the 80 number has proved problematic with just the 9/17 session trading above intraday only to be turned back down. Look to enter with a buy stop above the ascending triangle pattern at 80.25.