Double Busted Ascending Triangles

The figure to the right shows an example of a double busted ascending triangle in Oneok.

The ascending triangle forms between the two red trendlines. This one has price closing below the up-sloping trendline for a downward breakout. At A, the downward move reverses and climbs to B. When price closes above the top of the triangle, it busts the downward breakout for the first time. Price continues climbing to E, which is less than 10% above the highest peak in the triangle.

Then price tumbles. When it closes below the lowest valley in the ascending triangle, it busts the chart pattern for the second time. That happens at C. Notice that price continues at least 10% below the blue trendline (which shows the lowest valley in the pattern).

For a double bust, look for these elements.

1. Price busts a confirmed ascending triangle for the first time.
2. Price must move less than 10% before reversing (the move from the red line at D to E, in this example).
3. After an upward breakout, price closes below the bottom of the ascending triangle (C) or above the top after a downward breakout.
4. Price then moves at least 10% in the new direction.

If price fails to move at least 10% in the new direction, then it is a triple busted ascending triangle.