Thompson Reuters

Thompson Reuters ( TRI) is forming a triangle of a different sort. Shares of this financial data stock have been forming an ascending triangle bottom for the past several months as shares absorbed the after effects of a big downside move.

An ascending triangle is very different from a symmetrical triangle in form and trading implications. This pattern is formed by a horizontal resistance level (in this case at $30.30) and uptrending support. Essentially, as shares bounce in between those two technical levels, TRI is getting squeezed closer and closer to a breakout above that $30.30 resistance level. When that happens, traders have a buy signal.

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In more real terms, resistance at $30.30 has historically been a place where TRI buyers have encountered a glut of supply of shares; it's a price where sellers are more eager to sell and take gains than buyers are to buy. But uptrending support indicates that buyers are still actively involved in this stock. A breakout above $30.30 tells us that the excess supply of shares that's previously created resistance has been completely absorbed by buyers.

Once that price barrier has been taken out, TRI has much more room to run higher. Don't be early on this trade. Wait for $30.30 to get exceeded before buying.

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