Bull Flag Pattern
February 19th, 2010 at 2:00 pm Posted by
As part of The Dean’s commitment to providing Higher Education for a Higher Net Worth, The Dean plans to teach his students various lessons about chart patterns and other trading aspects, which can benefit the outcome of your short term trades.
Although there are different types of “flags,” a bullish flag indicates that a current uptrend may continue. Especially in short term, daytrading situations, The Dean believes the ability to recognize such patterns can greatly increase your bottom line.
While CollegeStock may be the only blog for your bottom line, The Dean would be doing his students a disservice if he ignored educational content on sites such as TheStockBandit.com.
Let’s take a look at what they have to say about the bull flag chart pattern:
“The bull flag pattern is found within an uptrend in a stock. This pattern is named for the resemblance of a flag on a pole. The bull flag is a continuation pattern which only slightly retraces the advance preceding it. The technical buy point is when price penetrates the upper trend line of the flag area, ideally on volume expansion.
Context: Found within an uptrend.
Appearance: The advance has solid volume and the upward price action is strong, which forms the vertical look of a flagpole. The resting period and slight retracement is narrow price action with a slight downward tilt or is horizontal (but no upward movement) with volume contracting during the flag portion of the pattern. The flag portion of the pattern has highs and lows which can be connected by small trend lines which are parallel, giving the flag portion the look of a small channel.
Breakout Expectation: The height of the flagpole may be added to the breakout area at the end of the flag to determine the expected advance. This is why the bull flag pattern is often found in the middle of stock advances.”
Source:
Bull Flag – Bull Flag Pattern
TheStockBandit.com
http://www.thestockbandit.com/bull-flag/
