Financial giant Goldman Sachs (GS) recently posted two major classic patterns on its daily chart worth an educational mention:

First, notice the lengthy declining triangle formation (pattern) both in the actual price and the narrowing momentum oscillator.

Price ejected down from the horizontal support line (base) and formed a retest at the throw-back point, which corresponded nicely with the 20 period moving average that set up an extremely high probability trade (with edge).

As price made new relative lows (January 22^nd), the momentum oscillator curved upwards and made a higher low (highlighted with the green line at the far right side of the chart). This served as a non-confirmation of lower prices, and allowed savvy traders to enter a quick “scalp” back to the declining 20 period moving average (another high probability trade with edge).

Price now sits at the key moving average, and the orientation of the three key averages is as bearish as it gets (20 beneath the 50, which is beneath the 200).

While a reversal may indeed occur, I simply wanted to point out a couple of examples of high probability trade set-ups that formed as a result of price action on the daily chart.

Adam Hewison further discusses trading triangles:

Always annotate your own charts based on how you view opportunities to trade and manage risk.