Flag pattern usually appears at the early stage of the trend. This pattern is witnessed in Glaxo Smithkline Pharmaceuticals ltd during Aug 2018. The conditions and qualifications are as explained below.
Conditions & Qualification of pattern:
1) A Steeper pole around 75 ~ 80 degrees. – In this case it is around 85 degrees (Approx) – Formed in 3 days.
2) Generally takes less time to form i.e 4 to 7 days – In this case, the flag period is 7 days.
3) Positive pole should give positive breakout – Witnessed in the chart.
4) Volume in Flag period is less. – Witnessed in the chart.
5) Volume during breakout is Higher – Witnessed in the chart.
Trade plan: LONG
Entry price: Rs.1605 (When the price breaks the flag’s top)
Stoploss: Rs.1543 (Lower point of the flag)
Target: Rs.1667 (Considering Risk to Reward of 1:1)
Result: The target achieved in 13 days.
