![]() ![]() ![]() ![]() There are usually five parts to a bull flag pattern: Takeaway: A bull flag pattern may indicate that a stock is consolidating within a continuing uptrend. The bear flag has a notable dip in the stock, followed by a consolidation and then a continuation of the downtrend. At the end of the countertrend (flag), a continuation of the upward trend is indicated by a rise in price above the upper boundary of the flag.īearish flags are the opposite of bull flags and represent what investors believe to be a downward trend of the stock. Note that the flag might be horizontal, but can often lean downward, demonstrating a countertrend to the prior spike upward in price. In the bull flag pattern, the flag portion of the chart may exhibit a 'W' pattern within the flag, distinguishing it from a 'M' pattern, which could signal a more negative double top rather than a bullish flag pattern. The bull flag pattern is identified by a flag pole rise in the stock followed by the stock trading pattern that hits support and resistance prices for a period of time where some investors are locking in gains where others are still trying to get into the position for a good price. Orientfootage/iStock via Getty Images What a Bull Flag Pattern IsĪ bull flag is used in the technical analysis of stocks. ![]()
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