😺The flag pattern is a trend continuation pattern, appropriately named after it’s visual similarity to a flag on a flagpole. A “flag” is composed of an explosive strong price move that forms the flagpole, followed by an orderly and diagonally symmetrical pullback, which forms the flag. When the trend line resistance on the flag breaks, it triggers the next leg of the trend move and the stock proceeds ahead. What separates the flag from a typical breakout or breakdown is the pole formation, representing almost a vertical and parabolic initial price move. Flag patterns can be bullish or bearish.
😽The Bearish Flag The flagpole forms on an almost vertical panic price drop as bulls get blindsided from the sellers, then a bounce that has parallel upper and lower trend lines, which form the flag.
😻When the lower trend line breaks, it triggers panic sellers as the downtrend resumes another leg down. Just like the bull flag, the severity of the drop on the flagpole determines how strong the bear flag can be.
😼Flag patterns require the patience to wait for the flag to form and plot the upper and lower trend lines. These will contain your entry and stop levels.
😺The chart above shows the exact guidance for breakout confirmation, consequent entry, stop placement and target selection.
😽Flag pattern is a very accurate pattern and I highly recommend you to try it in your trading.
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Love, Anabel❤️
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