Summary of Flags and Pennants Pattern

Summary of Important Points for Flag and Pennant Patterns:
  1. Both patterns are preceded by an almost straight line move (called a flagpole) on heavy volume.
  2. Prices then pause for about one to three weeks on very light volume.
  3. The trend resumes on a burst of trading activity.
  4. Both patterns occur at about the midpoint of the market move.
  5. The pennant resembles a small horizontal symmetrical triangle.
  6. The flag resembles a small parallelogram that slopes against the prevailing trend.
  7. Both patterns take less time to develop in downtrends.
  8. Both patterns are very common in the financial markets.
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