These alerts report standard triangle patterns, which are common in technical analysis.  A triangle pattern describes a stock price which keeps moving, but covers smaller and smaller price ranges over time.  A triangle is defined as a series of lower highs and higher lows.  It takes at least 5 consecutive highs and lows in this pattern before we report it.

We use the terms "triangle bottoms" and "triangle tops" because they are so common in the literature.  While triangles are important patterns, it is hard to say for certain if the price will go up or down after a triangle.  We call a triangle a "bottom" and color it green if the first point is at the bottom, and the first line is going up.  For the most common case, when the pattern contains exactly 5 turning points, a triangle bottom will end by going up.

After seeing a triangle pattern with 5 turning points, we might see more lower highs and higher lows.  These points make the triangle pattern stronger and more distinct.  Each one of these points means that the stock price changed direction.  In these cases we continue to use the first point, not the last point, to choose a name and icon for the pattern.  We use the initial because point because the initial trend is the largest and the strongest trend in the triangle.  The last point shows the smallest and the weakest trend.

The analysis and reporting of triangle patterns is very similar to the analysis and reporting of broadening patterns, described above.