Continuation Trading Setups

When these continuation crude patterns are formed they confirm that the current trend is going to continue moving in the same direction.

These patterns are used by crude traders to spot halfway points of the trend, this is because they form at the halfway point of a trend.

There are four types:

• Ascending triangle
• Descending triangle
• Bull flag/pennant
• Bear flag/pennant

Ascending Triangle

The ascending triangle is formed in an up trend & it shows that the upward direction of the market is going to continue.

It shows that there is a resistance level that the buyers keep pushing each time moving it higher, and once it breaks crude trading price will continue heading upwards.

The overhead resistance temporarily stops the market from advancing higher, while the rising trend-line beneath the pattern setup signals that buyers are still present. An upside penetration of the upper line is a technical buy signal for a market breaking out from an ascending triangle.

Found within a Oil Trading upwards trend, the ascending triangle forms as a consolidation period within the up trend and shows upside continuation will follow.

The market formed an ascending triangle during its up trend which led to upside continuation. Buy point is when crude trading price clears the upper sloping line & the market continues moving upwards.

Descending Triangle

The descending triangle is formed in a down trend & it shows that the downward direction of crude price movement is going to continue.

It shows that there is a support level that the sellers keep pushing each time moving it lower, and once it breaks crude price will continue to move downward.

Support temporarily stops the market from declining, while the descending sloping line above the pattern setup signals that sellers are still present. A down-side penetration of the lower line is a technical sell signal for a market breaking down from a descending triangle, & it indicates selling will follow.

Found within a Oil Trading downwards trend, the descending triangle forms as a consolidation period within the down trend and shows downside continuation will follow.

The market formed a descending triangle during its down trend which led to further selling and continuation of the downward crude trend. The technical sell signal is when crude trading price breaks-out the lower horizontal sloping line as selling resumes to push the market lower.

Bull Flag/Pennant

This pattern forms what looks like a rectangle. The rectangle is formed by two parallel lines that act as support & resistance for crude price until the price breaks out. In general, the flag will not be formed perfectly flat but it will be formed sloping.

The bull flag is found within a Oil Trading upwards crude trend. In this continuation pattern where the market retraces slightly, it is therefore a slight retracement with narrow crude price action which has a slight downwards tilt. The technical buy point is when crude trading price penetrates the upper line of the flag. The flag portion has highs and lows which can be connected by small lines that are parallel, giving it what looks like a small channel.

The pennant occurs at halfway point of a bullish upwards trend & after a break out a similar move equal to the height of the flagpole is expected.

The bull pennant above was just a resting period as the market gathered strength to break-out and move higher. The continuation signal was confirmed as a upper line was broken to the up-side.

Bear Flag/Pennant

This flag is found in a Oil Trading downwards crude trend. The bear flag is a continuation pattern where the crude trading price retraces slightly with a narrow crude price action which has a slight upward tilt. The technical sell point is when crude trading price penetrates the lower line of the inverted flag. The pennant portion has highs and lows which can be connected by small lines which are parallel, giving it what looks like a small channel.

The bear pennant above was just a resting period for the market prior to more selling. Continuation signal was confirmed as the lower line was broken to the downside.