What’s the symmetrical triangle pattern in technical analysis?

In the symmetrical triangle pattern, one trend line connects the consecutive peaks and another trend line connects the consecutive bottoms. Both of the trend line meets to form a triangle.

This pattern occurs in the uptrend and downtrend. The breakout or breakdown of this pattern decides whether its a continuation or reversal of the major trend. This pattern causes a consolidation phase in the major trend.

The following chart shows the symmetrical triangle pattern for a NASDAQ stock.

The symmetry pattern is formed when there’s indecision in the price movements. At this price point, there’s equal buying pressure and selling pressure. The prices form a zigzag shape. When the buying pressure is more than the selling pressure, breakout takes place and prices rise. When the selling pressure is more than the buying pressure, breakdown happens and the prices fall.

The pattern breakout and breakdown is useful for trend identification. It’s also useful for entry and exit points.

In technical analysis, the continuation price pattern concepts can be applied to companies like Cabot Oil & Gas (COG), Concho Resources (CXO), EOG Resources Inc. (EOG), and Laredo Petroleum (LPI). Some of these companies are part of the S&P Oil & Gas Exploration & Production ETF (XLE).