Technical Analysis Tools— Continuation Patterns

A continuation pattern is used to predict the resumption of a market trend that was in place prior to the formation of a pattern.

Triangle patterns come in three forms, symmetrical triangles, ascending triangles, and descending triangles.

Flags and pennants form over short periods of time—on a daily price chart,  typically over a week.

Flag: parallel trendlines.

Pennant: trendlines converge.

A pennant is a short-term formation whereas a triangle is a long-term formation.

The expectation: the trend will continue after the pattern in the same direction it was going prior to the pattern.

The price is expected to change by at least the same amount as the price change from the start of the trend to the formation of the flag or pennant.