How to Trade Continuation Chart Pattern in Stocks
Continuation Chart Patterns
When these continuation trading patterns are formed on the stock charts they confirm that the current stock trend is going to continue moving in same direction.
These continuation stocks patterns are used by traders to identify half way points of the stocks trend, this is because they form at the half way point of a stock trend.
There are four types of continuation chart patterns:
- Ascending triangle continuation trading pattern
- Descending triangle continuation chart pattern
- Bull flag/pennant continuation trading pattern
- Bear flag/pennant continuation chart pattern
Ascending Triangle Continuation Chart Pattern
The ascending triangle pattern is formed in an upwards stocks trend & it shows that the upward stocks market direction of the market is going to continue.
Ascending triangle pattern shows that there is a resistance level that the buyers keep pushing each time moving it higher, & once it breaks-out stocks price will continue moving in an upward stock trend.
Overhead resistance temporarily prevents the stocks market from advancing higher, while the rising stocks trend line beneath the ascending triangle chart pattern signals that buyers are still present. An upside penetration of the upper line of the ascending triangle chart pattern is a technical buy signal for a market breaking out from an ascending triangle pattern.
Found within a Stocks upwards trend, the ascending triangle pattern forms as a consolidation period within the up trend & indicates upside continuation will follow.
How to Trade Ascending Triangle Pattern - Ascending Triangle Continuation Chart Pattern
The market formed an ascending triangle pattern during its upward stocks market stocks trend which led to up-side continuation.
The buy signal point is when price clears the upper sloping line of the ascending triangle pattern and the stocks market continues moving upwards.
Descending Triangle Continuation Chart Pattern
The descending triangle chart pattern is formed in a downwards trend & it shows that the downwards direction of stocks price movement is going to continue.
Descending triangle chart pattern shows that there is a support level that the sellers keep pushing each time moving it lower, & once it breaks out stocks price will continue moving in a downwards trend direction.
Support temporarily prevents the stocks market from declining, while the descending sloping line above the descending triangle chart pattern signals that sellers are still present. A downside penetration of the lower line of the descending triangle pattern is a technical sell signal for a market breaking down from a descending triangle pattern, & this indicates selling will follow.
Found within a Stocks downwards trend, the descending triangle pattern forms as a consolidation period within the downwards stocks trend & indicates downside continuation will follow.
How to Trade Descending Triangle Pattern - Descending Triangle Continuation Chart Pattern
Market formed a descending triangle chart pattern during its downward stocks trend which led to further selling & continuation of the downward stock trend.
The technical sell signal is when price breaks lower horizontal sloping line of the descending triangle pattern as selling resumes to push the stocks market lower.
Bull Flag Continuation Trading Pattern
Bull flag chart pattern forms what looks like a rectangle. The rectangle is formed by two parallel lines that act as support and resistance for stocks price until the stocks trading price breaks out. In general, the flag will not be formed perfectly flat but this pattern will be formed sloping.
The bull flag pattern is found within a Stocks upward trend. In this continuation chart pattern where the stocks market retraces slightly, it is therefore a slight retracement with narrow stocks price action which has a slight downwards tilt.
The technical buy signal is when price penetrates the upper line of the Bull flag pattern. The flag portion has highs and lows which can be connected by small lines which are parallel, and it looks like a small channel.
Bull flag pattern occurs at halfway point of a bullish upwards stocks market stocks trend & after a breakout a similar move equal to the height of the flagpole is expected.
How to Trade Bull Flag Pattern - Bull Flag Continuation Chart Pattern
The Bull flag pattern above was just a resting period as the stocks market gathered strength to break-out and move higher.
The Bull flag chart pattern continuation stocks signal was completed as the upper line of the Bull flag chart pattern was broken to the upside.
Bear Flag Continuation Trading Pattern
Bear flag pattern flag is found in a Stock downward trend.
The Bear flag pattern is a continuation chart pattern where the price retraces slightly with a narrow price action which has a slight upward sloping tilt.
The technical sell signal is when price penetrates the lower line of the inverted flag. The flag portion has highs and lows which can be connected by small lines which are parallel, and it looks like a small channel.
How to Trade Bear Flag Pattern - Bear Flag Continuation Chart Pattern
The Bear flag chart pattern above was just a resting period for stocks market prior to more selling.
The Bear flag pattern continuation signal was confirmed as the lower line of the Bear flag pattern was broken to the down-side.
