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Flag pattern is a scenario in a stock price movement where a regular flag structure has appeared i.e., a steeper price movement which is followed by a sideways movement. A flag pattern usually give the same side breakout. (If the steeper pole is positive, then the bullish trend is expected. If the steeper pole is negative, then bearish trend is expected.)
Conditions:
Either long or short position is created at the breakout based on whether the pole is positive or negative respectively. A high volume at the breakout shows that the pattern is more aggressive.
Flag Pattern: Is a steeper pole, rectangular shaped low volume is expected at the sideways movement can be considered as Flag, generally takes less time to form, this should last 3 to 7 days, Positive Pole Flag should give positive breakout, Volume is expected to increase while giving breakout.
flag pattern is considered as favorable pattern for long position characterized by steeper pole with rectangular sideways movement and positive out break with high volume.
It is a price pattern, which looks like a flag.
It is powerful, easy to spot.
Shows early stages of the trend.
Must have a steep pole, which should be 70 -80% steep and a rectangular price pattern which looks like the flap .
Denotes momentum is increased in a short span.
Time 3 to 7 days.
Volume should be low in the flap region.
Breakout will be on the same side.
Volume should be high at the breakout
if the price goes up in a 70 – 80 degree way then if it is moving sidewards and the duration is 3 to 7 days then it is expected that the price may go up. within this time duration flag should not be drifted.
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