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Flags and Pennants
- Thread starter bowman
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I am new to trading these patterns, so go easy on me if I'm seeing things...
BRU looks like a consolidation above support after a gap. Support has been holding.
Looks like a good little flag forming there Av Joe. In theory it should a break out in the direction of the current trend which is up. look for increasing vol on the break out. They are supposed to be a continuation pattern, but any thing could happen in this market. Having said that, it also looks like a descending triangle.
Wysiwyg
Everyone wants money
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No and no, but you might believe cows lay eggs and chickens are milked.:dunno:
Yep. All a little wee bit confusing.
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There's nothing confusing about the psychology of these patterns.
1. A stock has a rapid run up on big volume over a few days, usually because of an event or news.
2. The stock consolidates in some kind of pattern.
3. The stock either breaks up and runs again or breaks down - depending on the validity of the original news, or at least the markets perception of that.
A similar pattern can occur over a longer period of time, where the 'flagpole' is not so vertical, perhaps at 45 degrees, and then a flag like consolidation pattern forms.
All there patterns are tradeable.
I was considering starting a thread called 'Stocks that run really hard and really fast, and then have a breather while the participants decide what happens next' - but it's not very catchy is it?
:There's nothing confusing about the psychology of these patterns.
1. A stock has a rapid run up on big volume over a few days, usually because of an event or news.
2. The stock consolidates in some kind of pattern.
3. The stock either breaks up and runs again or breaks down - depending on the validity of the original news, or at least the markets perception of that.
A similar pattern can occur over a longer period of time, where the 'flagpole' is not so vertical, perhaps at 45 degrees, and then a flag like consolidation pattern forms.
All there patterns are tradeable.
I was considering starting a thread called 'Stocks that run really hard and really fast, and then have a breather while the participants decide what happens next' - but it's not very catchy is it?
Thanks for that Bowman. I guess for any of these patterns, it depends on the direction of the breakout, so you trade in that direction with tight stops. What about a thread under "Common chart patterns" whether it be pennants, flags, wedgies, ascending/descending/ symmetrical triangles, H&S, inverted H&S, doublt/triple/multiple tops, channels, cup&handle ect ect ect.
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The stock runs up
Sellers move in initially to take profits
Buyers come in to try and get on the trend
A small struggle between buyers and sellers occurs
After about a week volume is really drying up
The direction we move is dependant on who is winning between buyers and sellers
Brad
Sellers move in initially to take profits
Buyers come in to try and get on the trend
A small struggle between buyers and sellers occurs
After about a week volume is really drying up
The direction we move is dependant on who is winning between buyers and sellers
Brad
Sean K
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Sean K
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Trading halt for a capital raising so I doubt this will break to the upside.
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just started following this thread.
I have been interested in what I call small triangle/dropping volumes, but havent taken much notice of flags and pennants.
I would be interested in yr take on this BMN chart.
Was that a pennant and followed by a flag??
Which way does the SP go from this scenario?
Please excuse my other trend lines.
cheers
dazt49
I have been interested in what I call small triangle/dropping volumes, but havent taken much notice of flags and pennants.
I would be interested in yr take on this BMN chart.
Was that a pennant and followed by a flag??
Which way does the SP go from this scenario?
Please excuse my other trend lines.
cheers
dazt49
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How can you even read that mess? Looks like a plate of spag with all those lines all over it, you don't use Gann do you?
:BMN actually came up on my triangle/pennant scan the other night. Don't know which way it will break but yesterdays bar isn't very positive. Probably favouring a break down to test support @ 85-90c.
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nomore,
Well thanks for canning my "system" lol
I should have cleaned it up before posting.
cheers
Well thanks for canning my "system" lol
I should have cleaned it up before posting.
cheers
nomore,
Well thanks for canning my "system" lol
I should have cleaned it up before posting.
cheers
lol, as long as you can understand it that is all that matters but I started to get a headache looking at that chart
:
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I am always looking for support/reistance,hence all the trend lines.
In the sequence before yr pennamt (ie from the high on 8th April to 22nd April) isnt that a sort of flag/pennant pattern?
In the sequence before yr pennamt (ie from the high on 8th April to 22nd April) isnt that a sort of flag/pennant pattern?
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How can you even read that mess? Looks like a plate of spag with all those lines all over it, you don't use Gann do you?
BMN actually came up on my triangle/pennant scan the other night. Don't know which way it will break but yesterdays bar isn't very positive. Probably favouring a break down to test support @ 85-90c.
Hey nomore4s
Generally, if the stock is trending down, it will probe lower than the triangle, push up slightly into the triangle (as your chart has done), touch it 5 times and then break down through the bottom. If the trend is extremely strong (like we saw on XJO), it may only touch 3 times. A classic elliott wave triangle has 5 internal points. Im favouring a break to the downside here.
Cheers
Brad
My marked triangle is actually part of a larger pattern - it is the larger pattern that was picked up on my scan - with my system there is a possible trade on there.
Please note - this is not advice to trade this stock on this pattern or even a recommendation - I will probably not be trading it myself. This is for discussion purposes only!
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nomore,
Yes understood, i am just trying to see In one easy lesson, how these things work lol
So how do you deduce it breaking to the downside?
thanks
Don't know really, probably no more than a guess which is why you wait for confirmation of a break either way before taking a trade.
BMN could actually break down from the micro triangle test the bottom line of the larger pattern and then break up from the larger pattern. BMN is actually trending up atm even though the higher timeframes are still down.
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1: Refer to my signature for the best answer
2: I said this earlier in the thread
"The stock runs up
Sellers move in initially to take profits
Buyers come in to try and get on the trend
A small struggle between buyers and sellers occurs
After about a week volume is really drying up
The direction we move is dependant on who is winning between buyers and sellers "
Now if we are in a downtrend, change it around to
"The stock runs down
Shorters cover initially to take profits (puts buying pressure)
Sellers come in to try to minimise their losses (puts selling pressure)
A small struggle between shorters and sellers occurs
After about a week volume is really drying up
The direction we move is dependant on who is winning between shorters and sellers "
