Flags and Pennants Figures

Flags
This figure reflects a pause in the rising or falling phases. The lines that contain rises or drops on the prices are parallel. They are usually followed by a descent of the negotiated volumes, independently from the rising or falling phase and they are formed, approximately, at the middle of such a phase.

Interpretation: At the end of the flag, the evolution will continue being as before its formation, that is, rising or falling. They are sings that the market is consolidated and the predominant tendency will continue.

Pennants
They are formed by means a series of recuperations and maximum convergent rises in the form of a Pennant. They are an intermediate interruption between a rising and dropping phase. The main difference with the flags is that these are formed inside a rectangle while the pennants are formed inside a triangle.

The pennants are different from the triangles in that they indicate changes of tendencies.

Interpretation: the formation of pennants is usually accompanied by descents on the contracting volumes that usually increase when they are already formed. As with the flags, they are signs that the market is consolidated and that the predominant tendency will continue.

Beginner Money Investing Chart Patterns Interpretation Double and Triple Floors Head and Shoulders Triangles Graphics Flags and Pennants Figures