This shows you the differences between two versions of the page.
| Both sides previous revision Previous revision Next revision | Previous revision | ||
|
chart_analysis:chart_patterns:flag_pennant_continuation [2023/05/30 17:53] jayanthi |
chart_analysis:chart_patterns:flag_pennant_continuation [2023/05/30 17:58] jayanthi [How Do You Identify Flags and Pennants?] |
||
|---|---|---|---|
| Line 1: | Line 1: | ||
| ====== Flag, Pennant ====== | ====== Flag, Pennant ====== | ||
| + | |||
| + | ===== What Are Flag and Pennant Chart Patterns? ===== | ||
| Flags and Pennants are short-term continuation patterns that mark a small consolidation before the previous move resumes. These patterns are usually preceded by a sharp advance or decline with heavy [[:glossary_v#volume|volume]], and mark a midpoint of the move. | Flags and Pennants are short-term continuation patterns that mark a small consolidation before the previous move resumes. These patterns are usually preceded by a sharp advance or decline with heavy [[:glossary_v#volume|volume]], and mark a midpoint of the move. | ||
| Line 13: | Line 15: | ||
| - **Volume.** Volume should be heavy during the advance or decline that forms the flagpole. Heavy volume provides legitimacy for the sudden and sharp move that creates the flagpole. An expansion of volume on the resistance (support) break lends credence to the validity of the formation and the likelihood of continuation.\\ \\ | - **Volume.** Volume should be heavy during the advance or decline that forms the flagpole. Heavy volume provides legitimacy for the sudden and sharp move that creates the flagpole. An expansion of volume on the resistance (support) break lends credence to the validity of the formation and the likelihood of continuation.\\ \\ | ||
| - **Targets.** The flagpole length can be applied to the resistance break or support break of the flag/pennant to estimate the advance or decline.\\ \\ | - **Targets.** The flagpole length can be applied to the resistance break or support break of the flag/pennant to estimate the advance or decline.\\ \\ | ||
| + | |||
| + | ===== How Do You Identify Flags and Pennants? ===== | ||
| Even though flags and pennants are common formations, identification guidelines should not be taken lightly. It is important that flags and pennants are preceded by a sharp advance or decline. Without a sharp move, the reliability of the formation becomes questionable and trading could carry added risk. Look for volume confirmation on the initial move, consolidation and resumption to augment the robustness of pattern identification. | Even though flags and pennants are common formations, identification guidelines should not be taken lightly. It is important that flags and pennants are preceded by a sharp advance or decline. Without a sharp move, the reliability of the formation becomes questionable and trading could carry added risk. Look for volume confirmation on the initial move, consolidation and resumption to augment the robustness of pattern identification. | ||