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What’s the Flag?

A good Flag/Pennant chart pattern normally starts with a strong rally on high volume (consists long green candle) and followed by a..

Among all the chart formation, which chart pattern is likely to display strong momentum on the breakout? Flag/Pennant pattern is a smaller structure & short term pattern. The price is having a higher probability to present a strong surge and momentum upon the breakout. 

130420-Flag

A good Flag/Pennant chart pattern normally starts with a strong rally on high volume (consists long green candle) and followed by a retracement with a diminishing/declining volume. Entry triggered when the price makes a breakout and moves higher than the previous long green candle.

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A live example from today’s trading is the breakout of SCOMNET (0001). It had a rally and formed long green candle with strong volume on 6th April. The price retraced with small candles throughout the rest of the week, on a declining volume. Upon the breakout of RM0.655, it had completed the Flag formation breakout. It was triggered on M+ Wiz at 9.11am when the volume was elevated, under rule Resistance – Breakout with High Volume.

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Disclaimer: This is not a buy or sell recommendation. We encourage you to research on the particular stock or get in touch with your remisier/dealer for assistance before making your decision.

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