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Consolidation After Decline Results in Descending Triangle Pattern on H4 Chart of Natural Gas

February 18, 2018 at 21:44 by Vladimir Vyun

Prices for natural gas were consolidating after a decline on the four-hour chart of natural gas, resulting in a formation of a descending triangle pattern. It is usually a continuation pattern, which suggests an extension of the previous drop after a period of consolidation. Such pattern forms as prices bounce off a support level with ever decreasing volatility. A breakout occurs when prices drop below the support.

On the present chart, the triangle is shown with the yellow lines. The cyan line, which is situated 10% of the triangle’s width below the lower border, offers an entry point for short positions in case of a downside breakout. The green line, which is situated below the yellow line by the pattern’s width, offers a profit-taking objective. As the descending triangle is a bearish pattern, trading upside breakouts is ill-advised. You can click on the image to see a full-size version:

The chart was built using the ChannelPattern script. You can download a MetaTrader 4 chart template for this natural gas pattern. You can also trade it using the free Chart Pattern Helper EA.

If you have any questions or comments regarding this descending triangle pattern on the chart of natural gas, please feel free to submit them via the form below.

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