Right-angle triangles, like other triangles, are formed by two converging lines, but they differ in that one of the lines is flat or horizontal. Another difference is that we know in advance the direction in which the triangle should normally resolve -- the basic rule being that the flat line will fail. No guarantees, of course.

There are two types of right-angle triangles. The ascending triangle, which has the flat side at the top, and the descending triangle, which has the flat side on the bottom.

The descending triangle is a bearish formation. While the bulls are able to stand their ground on the bottom, the declining tops line shows how they steadily lose ground to the bears when they try to advance prices. This ultimately results in a breakdown through the support as the bears take command.

The ascending triangle is bullish. The dynamics are opposite those of the ascending triangle.