Flags and Pennants
stock chart patterns
Flags and pennants are very solid stock chart patterns. They signal very good trading opportunities. This type of stock chart patterns is quite well known and widely used.
It can be used in intra-day stock trading and intra-day stock charts, swing and position traders are using this stock chart pattern on daily and weekly charts too.I like these chart patterns, and a lot of other traders agree that they’re the most reliable chart patterns. They’re known as continuation stock chart patterns. You can find them after a strong trend move. These patterns represent consolidation and little sideways movement. When the price breaks from the pattern, then the trend resumes again. There are bullish and bearish version of this stock chart pattern. It is well documented in most good
stock trading books.
I have summarized most important info about them on this page.
Bullish version of this stock chart pattern
The bullish version has lower lows and lower highs against the previous main trend direction.
Trend lines
for highs and lows are parallel.
Bearish flag chart pattern
The bearish type of pattern is based on higher highs and higher lows against the major trend.
Pennant stock chart pattern
Pennants have another design. Trend lines are not parallel, but they’re going to meet at one point. This pattern is smaller in size and also needs less time to develop.
I like these stock chart patterns very much. A lot of my trade setups are based on these patterns.
My online stock trading tips
for these chart patterns
I put a lot of attention to
stock trading volume
in my
technical analysis of stock charts.
Stock trading volume can tell you a lot about other players on financial markets. When I see such pattern I like to see that volume during development of this pattern is decreasing. It means that investors are not heavy closing their positions but patiently wait for continuation of former trend move (
uptrend
or
downtrend
) And finally when price is breaking from these stock chart patterns I like to see
increase in stock trading volume.
It is good to have some way how to monitor
stock trading volume intraday
to be alerted in advance when stock trading volume is increasing above average level.
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