As of 2nd July, 2020 closing price, I have come across an Ascending Triangle Breakout on one of the future Nifty 50 stock. The stock is being included in the Nifty 50 as a replacement to Vedanta Limited, which is getting delisted from the market.
The name of the stock is HDFC Life Limited.
An Ascending Triangle can be considered as a neutral pattern with a bullish bias. This means that one needs to definitely wait for a confirmation as to where it must be traded. The stock was able to give a close above ~540 in this case. This meant that there was a positive bias confirmed.
The news of this stock being included in Nifty 50 has come on the 2nd of July, thus, indicating the fact that charts do lead the stocks and the market in general. Therefore, it is important for even investors to know Technicals.
How to trade the pattern?
Once the breakout has been confirmed, one can use various retracement levels or can look at important trend lines. One can also look at the depth of the triangle from the starting to give an idea to where it can rally. Truth be told, there is no one right way. However, placing a Stop Loss is not subjective. The stop loss will be the upper trend-line of the triangle. Once the trend gathers steam, people like me would see the next best place where the price can go upto and trail the Stop Loss.
This pattern is easy, clean and works very well in the market.
Disclaimer: Chart and Stock is for illustration purpose only, do your due diligence before trading; The Bull of Dalal Street is an educational initiative.