Learn How to Trade Triangle Chart Pattern - Union Bank of India: Triangle Breakout Trade Setup

Union Bank of India has shown a clear breakout from a descending triangle pattern, which is a strong bullish signal. This pattern is widely regarded as a continuation pattern, and the recent price action confirms the potential for upward movement. The breakout is backed by a successful retest of the triangle’s resistance line, now acting as support.

Trade Setup Details

• Entry Price: ₹126.06
• Stop Loss: ₹117.50
• Target Price: ₹159.88

Technical Analysis

Several technical indicators add confidence to this setup:

• 200 EMA Break: The price has moved above the 200 EMA, signaling a shift in long-term sentiment from bearish to bullish.
• RSI Strength: The RSI is trending upward and remains below overbought levels, indicating more potential upside.
• Volume Surge: A significant increase in volume during the breakout confirms strong buying pressure.

The height of the triangle pattern has been projected to determine the target price, aligning with ₹159.88, offering a favorable risk-reward ratio.

Trading Strategy

Traders can consider entering at ₹126.06, ensuring the breakout sustains above this level. The stop loss is placed at ₹117.50 to minimize downside risk, while the target of ₹159.88 offers a significant upside potential. For better risk management, consider trailing your stop loss as the price progresses toward the target.

Why This Setup Stands Out

The combination of a strong breakout, volume confirmation, and favorable technical indicators makes this trade setup compelling. The descending triangle breakout pattern often marks the start of a new bullish trend, which is further supported by the stock reclaiming its 200 EMA.

Conclusion

Union Bank of India offers an excellent trading opportunity for swing traders. With a clear entry, stop loss, and target in place, this setup provides a structured approach to trading. Always remember to manage your position size and adhere to your risk management strategy to safeguard your capital.

Note: This analysis is for educational purposes only and should not be considered financial advice. Please do your own research and consult a financial advisor before making any trading decisions.