Descending Triangle

A descending triangle is a continuation chart pattern in technical analysis that typically signals bearish sentiment. It is the mirror image of the ascending triangle, formed when a stock's price creates a series of lower highs (indicating increasing selling pressure) while repeatedly testing a horizontal support level. The pattern creates a triangle shape with a flat bottom and a falling upper trendline. As the two lines converge, the price range compresses, building pressure that usually resolves with a breakdown below the support level. The pattern is considered bearish because sellers are willing to sell at progressively lower prices (creating the declining resistance line), while buyers are defending a fixed support level that is being tested repeatedly and weakening with each touch. Eventually, selling pressure overwhelms the buyers, and the price breaks below support. The measured move target for a descending triangle breakdown is typically equal to the height of the triangle (the distance from the flat support to the highest point of the pattern) subtracted from the breakdown point. Volume tends to decrease during formation and should expand on the breakdown for confirmation. While descending triangles resolve downward roughly 64% of the time, they can occasionally break upward (particularly when they form during strong bull markets), so traders wait for a confirmed breakdown with volume before entering short positions. The pattern can form over various timeframes.