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FLAG AND PENNANT PATTERN

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FLAG AND PENNANT PATTERN The flag and pennant patterns are commonly found patterns in the price charts of financially traded assets stocks, bonds, futures, etc. The patterns are characterized by a clear direction of the price trend, followed by a consolidation and range bound movement, which is then followed by a resumption of the trend.The continuation patterns which we have taken up so far in this Study  the various types of Triangles and the Rectangle have one    FLAG  PATTERN     The flag pattern is encompassed by two parallel lines. These lines can be either flat or pointed in the opposite direction of the primary market trend. The pole is then formed by a line which represents the primary trend in the market. The pattern is seen as the market potentially just taking a “breather” after a big move before continuing its primary trend. The chart below illustrates.Thus, the first requirement of the Flag formation is a nearly vertical price movement on th