Wednesday, June 20, 2007

Searching For Triangle Pattterns

"Arithmetic! Algebra! Geometry! Grandiose trinity! Luminous triangle! Whoever has not known you is without sense!"

Comte de Lautreamont


Triangle patterns can prove to a profitable pattern to come across. In its simplest form it is a series of lower-highs matched up with a series of higher lows. This contraction in price is usually accompanied by a decrease in volume as the triangle forms.

Using Telechart 2007 it is easy to write a simple scan to find this pattern. This is an example of a simple formula that finds very general triangle patterns.

C > 5 AND
XAVGV8 > 1500

What this basically says is the high-today has to be less the the highest high for the past 5 days, and the highest high for the past 5 days has to be less than the highest high for the past 13 days, and the highest high for the past 13 days has to be less that the highest high for the past 34 days. The formula of the lower side of the triangle is the opposite; the low today has to be greater than the highest low over the past 5 days,and the lowest low for the past 5 days has to be greater than the lowest low over the past 13 days, and the lowest low for the past 13 days has to be greater than the lowest low over the past 34 days. The minimum price has to be greater than 5 and the 8day exponential moving average for volume has to be greater than 150,000 shares per day.

Here are some samples of the results of this simple scan.

EXM - Excel Maritime Carriers

QMAR - Quintana Maritime LTD.

MSCC - Micromsemi Corp.

KOG - Kodiak Oil & Gas

TMX - Telefonos De Mexico

URZ - Uranerz Energy Corp.

Changing the inputs in this simple scan can produce triangle pattern set ups on various time frames from intra-day patterns to monthly set ups. These are profitable patterns to trade on any time frame. Looking for longer forming triangles with enough width to project a sufficient move is a key element. A simple formula for projecting the profit targets from a triangle can be viewed here.

Telechart 2007 software is a very easy software package to write this and other scans with. It is very easy to sort for volume, moving average crossovers, results from custom indicators, ect. This can all be done on a focused group of stocks or an entire universe of stocks and indexes. If you can write your idea on paper, you can probably scan for it using their software. It is also available with a 30day free trial.(I use both Telechart and Metastock, if there are formulas you might need help writing, click the comment button above and I will try to help in any way I can.)


EXM - Excel Maritime Carriers Ltd. (Excel) is a shipping company. It is an owner and operator of dry bulk carriers and a provider of worldwide seaborne transportation services for dry bulk cargoes, such as iron ore, coal and grains, as well as bauxite, fertilizers and steel products.

QMAR - Quintana Maritime Limited is an international provider of dry bulk marine transportation services. Dry bulk vessels transport a variety of cargoes, including coal, iron ore and grain.

MSCC - Microsemi Corporation (Microsemi) is a designer, manufacturer and marketer of high-performance analog and mixed-signal integrated circuits and high-reliability semiconductors. The Company's semiconductors manage and control or regulate power, protect against transient voltage spikes and transmit, receive and amplify signals. Its products include individual components, as well as integrated circuit solutions. The principal markets the Company serves include defense, commercial air/space, industrial/semicap, medical, mobile connectivity, and notebook/liquid crystal display televisions (LCD TVs)/display.

KOG - Kodiak Oil & Gas Corp. is an independent energy company focused on the exploration, exploitation, acquisition and production of natural gas and crude oil in the United States. The Company’s oil and natural gas reserves and operations are concentrated in two Rocky Mountain Basins. All of its drilling activities are conducted on a contract basis by independent drilling contractors. The Company does not own any drilling equipment. Kodiak Oil & Gas Corp. explores for conventional and unconventional gas plays in the Green River Basin in Wyoming and Colorado, and for oil in the Williston Basin in Montana and North Dakota. Its oil is transported mostly by trucks and, if available, pipelines.

TMX- Telefonos de Mexico, S.A. owns and operates telecommunications system in Mexico. It is a nationwide provider of fixed-line telephony services, as well as fixed local and long-distance telephone services to more than 22,800 locales. It also provides other telecommunications and telecommunications-related services, such as corporate networks, Internet services, directory services, information network management, telephone equipment sales, satellite services, paging services and interconnection services to other carriers. It offers voice, data and Internet services in Brazil, Chile, Peru, Colombia and the United States.

URZ - Uranerz Energy Corp., formerly Carleton Ventures Corp., is engaged in the acquisition, exploration and development of uranium properties. The Company owns interests in properties in Wyoming, United States; Saskatchewan, Canada, and Mongolia. It has entered into joint venture agreements for each of its Saskatchewan and Mongolia properties, whereby the joint venture partner for each property can earn an ownership interest in the property. Uranerz is an exploration-stage company.

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