Summary of Flags and Pennants Pattern

Let’s summarize the more important points of both patterns.

  1. They are both 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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