Continuation Chart Patterns

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

These patterns are used by traders to spot halfway points of the trend, this is because they form at 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 and it shows that 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 gold price will continue moving upwards.

The overhead resistance temporarily prevents the market from advancing higher, while the rising trend line beneath the pattern 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 upwards trend, the ascending triangle forms as a consolidation period within the up trend & indicates upside continuation will follow.

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

Descending Triangle

The descending triangle is formed in a down trend & it displays that down-wards direction of gold 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 gold price will continue to move down-wards.

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

Found within a XAUUSD down-wards trend, the descending triangle forms as a consolidation period within the down trend & indicates downside continuation will follow.

The market formed a descending triangle during its down trend which led to further selling & continuation of the down-wards gold trend. The technical sell signal is when price breaks lower horizontal slanting 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 the price until the price breaks out. In general, the flag will not be formed perfectly flat but it will be slanting.

The bull flag is found within a upward trend. In this continuation pattern where the market retraces slightly, it is therefore a slight retracement with narrow gold price action that has a slight down-wards tilt. The technical buy point is when price penetrates the upper line of the flag. The flag portion has highs & 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 breakout a similar move equivalent to the height of the flagpole is expected.

The bull pennant above was just a resting period as the market gathered strength to breakout & 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 downwards trend. The bear flag is a continuation pattern where the price retraces slightly with a narrow gold price action that has a slight up-ward tilt. The technical sell point is when 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 completed as the lower line was broken to the downside.