Continuation Stocks Trading Patterns

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

These patterns are used by stocks traders to identify halfway points of the trend, this is because they form at the half way 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 stock trend and it shows that upwards 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 stocks price will continue heading upward.

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

Found within a Stock upward stock trend, the ascending triangle forms as a consolidation period within the up stock trend & indicates upside continuation will follow.

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

Descending Triangle

The descending triangle is formed in a down stock trend & it shows that the downwards direction of stock 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 stock price will continue to move downwards.

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

Found within a Stocks downward stock trend, the descending triangle forms as a consolidation period within the down stock trend & indicates downside continuation will follow.

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

Bull Flag/Pennant

This stock trading pattern forms what looks like a rectangle. The rectangle is formed by two parallel lines that act as support & resistance for the stocks price until the stocks 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 Stock upward stocks trend. In this continuation pattern where the stocks market retraces slightly, it is therefore a slight retracement with narrow stocks price action that has a slight downwards tilt. The technical buy point is when stocks price penetrates the upper line of the flag. The flag portion has highs & lows which can be connected by small lines which are parallel, giving it what looks like a small channel.

The pennant occurs at halfway point of a bullish upwards stock 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 stocks 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 Stock downward stocks trend. The bear flag is a continuation pattern where the stocks price retraces slightly with a narrow stocks price action that has a slight upward tilt. The technical sell point is when stocks 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 stocks market prior to more selling. The continuation signal was confirmed as the lower line was broken to the down-side.