Continuation patterns

Continuation patterns are chart patterns that appear as periods of a stall in price movement after a strong trend, and whose appearance indicates that the trend is not going to reverse but rather will continue. The continuation pattern may be a period of consolidation or mild retracement, but when they appear, they are a signal that the initial trend will continue at some point in time in the nearest future.

The following chart patterns are continuation patterns:
  • Flags
  • Pennants
  • Rectangles
  • Ascending and Descending Triangles

The most accurate continuation patterns are those that occur following a trend that has been on for some weeks or even months. As such, the most reliable continuation patterns should be derived from long term charts such as the daily charts.