Flag And Pennant Chart

Flags and Pennants are short-term continuation patterns that mark a little consolidation before the previous move resumes. These patterns are usually preceded by a pointy advance or decline with heavy volume and mark a midpoint of the moves. Price is expected to continue in the direction of the prior move once it breaks out of the flag or pennant pattern. Flags and Pennants are short-term continuation patterns that mark a little consolidation before the previous move resumes. These patterns are usually preceded by a pointy advance or decline with heavy volume and mark a midpoint of the moves. Price is expected to continue in the direction of the prior move once it breaks out of the flag or pennant pattern.

Move

There should be evidence of a prior trend to be called a continuation pattern. In heavy volume, flags and pennants require evidence of a rapid advance or decline. Typically these moves occur on heavy volume and can contain gaps. Usually this move represents the first leg of a significant advance or decline and the flag/pennant is just a pause.



Flagpole

The flagpole should is the distance to the high or low of the flag / pennant from the first resistance or the support break. The sharp advance (or decline) forming the flagpole should break a trend line, or level of resistance / support. The flagpole forms a line extending from this break up to the flag / pennant high.



Flag

A flag is a small pattern of rectangles which slopes against the previous trend. If the previous move was up then the flag would fall down. If the move was down, the flag will hang up. Since flags are usually too short in duration to really have peaks of reaction, the price action necessarily need to be contained between two parallel trend lines.

What Is A Bullish Flag?

A bull flag is a continuation patter that occurs as a brief pause in the trend following strong price move higher. The bull flag chart patterns looks like a downward sloping channel / rectangle denoted by two parallel trend-lines against the preceding trend. During this period of consolidation, volume dry up through its formation and resolve to push higher on breakout.

What Is A Bearish Flag?

A bear flag is a technical pattern that provides an extension/continuation to an existing downward trend. The bear flag formation is underlined from an initial strong directional move down, followed by consolidation channel in an upwards direction.

Pennant