In this analysis, the theory of triangle pattern has been applied on the company ‘ABB Ltd’ during the period November 2017 to January 2018, which accounts for roughly 2 months for this formation to happen. The fundamental factors for this shape to form in a chart are :
1. There needs to be 5 Wave corrective pattern (A,B,C,D,E) as marked in the above shown chart.
2. The triangle area should be minimum 1.5 months.
3. The triangle breakout is expected to occur around 65-70% of the zone.
4. The breakout in the prices of stock should be supported by a good volume of the stocks traded.
Therefore, in concurrence with the above mentioned factors, we can conclude that a triangle formation has happened in the company, wherein there is a positive breakout happening during the month of January 2018. So the buyer is advised to take a long position anticipating an upward surge in the prices of the company. The appropriate entry prices along with the respective stop loss and the target price to sell the stock have been derived keeping in view the market factors.
