Possible Flag forming (Chart)A BULLISH and very reliable pattern (scroll down to see chart):
"Sharp Move: To be considered a continuation pattern,there should be evidence of a prior trend.
Flagsand pennants require evidence of a sharp advance or decline on heavyvolume. These moves usually occur on heavy volume and can contain gaps.This move usually represents the first leg of a significant advance ordecline and the
flag/pennant is merely apause."
A flag occurs when there is a straight up move in astock. This movement is often nearly vertical, and at the veryleast isextremely steep. The move is so rapid, in fact, that on a dailychart atrendline can't be drawn. Typically, the move occurs on verystrongvolume and lasts a few trading days. Gaps will often be presentwithinthis part of the move.This rapid upside movement is called a"flagpole." Gradually, however, buyers are no longer willingto bid the stock up. Sellers, many of whom are showing extremelyniceprofits in a short period of time, move in to nail them down.But ratherthan sell off sharply, prices decline very gradually as eagerbuyers whomissed the initial move snap up the stock.
The flag is thought of as a consolidationpattern. Astock typically leaves a consolidation pattern in the same wayit entersit. The flag is therefore expected to eventually move higher.What formsafter the flagpole is the flag itself. Visualize your own national flag flying in a gentle breeze and you willpicturethe flag formation.
