In this one we're taking a look and flag in Pennant patterns now.
Flag in Pennant patterns are very similar they will have.
There's two versions of each.
They will have a run higher and then there will be consolidation of one sort or another.
And as I'm sure you can imagine that's what makes the difference.
So in a flag you'll see a small pullback and a bit of a channel and a pennant.
You see more of a triangle after a move higher in a bullish version.
Now there is also the bearish version which is the exact opposite
basically you're looking at a run lower and then a slight pullback in a channel or a run lower in a
triangle.
The beauty of these patterns is that everybody in the world pays attention to him basically and they're
obvious a lot of times they also come with a built in measuring stick.
So what you will see is a pattern like this.
A lot of times people will enter on the brink of the flag and you measure from the run up to the top
of the flag.
If that's ten dollars well you're aiming for ten dollars your stop loss of course is on the other side
of the pattern if that gets broken then it invalidates everything in the Pennant.
Let's just say it's eight dollars on a break Kyra you're looking for eight.
Now of course it works in the same way.
But lower five dollar pull if you will of the flag you break down you're looking to match the length
of the pole six dollar pull on the pennant.
You're looking for six dollars.
It's pretty straightforward and they're very obvious and that's why people like me you just put your
stop loss behind the consolidation pattern and you let it rip.
So with that in mind let's take a look at a few examples I have marked up on the charts.
This is Hyatt and this is a bullish pennant because you can see that we clearly had a downtrend line
and an uptrend line after a run higher this poll if you will is from 38 to 43.
So it was anticipated to be a five dollar run on the breakout.
So we're looking at about forty seven and a quarter.
And you can see that we did in fact hit it took a while to get there.
But we did in fact hit it and in fact most people would have been happy taking profit at the sign of
trouble there and a shooting star.
So you may have missed it by a quarter.
But essentially the same thing nice gap higher over here in Zillow we have a bearish pennant.
You can see it was hit three times there three times.
They're kind of poorly drawn on my part but it is there you can see that the poll was roughly a seven
dollar poll.
So you're looking at 48 dollars.
You hit that rather quick right about here by about four or five days after the fact
Philip Morris formed a bullish flag.
Here you can see we ran higher and then we consolidated slightly pulling back.
So you're looking for the height of the flag eighty seven to ninety two.
So it's five dollars.
We break out during this day five dollars above ninety two and a half is ninety seven and a half and
you can see that we get there.
And of course continued to go higher in here and Google we get a bearish flag.
Nice run lower and then we just kind of consolidate in this channel for a while we gap lower.
And if you had this pattern already marked down on your chart you would have known what to expect on
the move to the downside.
You take this extrapolate it you can see that we did eventually hit the target of about 247 and a half
after this huge move that you know of course did take a couple of months but it was such a large move
that it certainly was extraordinarily profitable.
And again like you know wedgies and triangles these are patterns that show up on all time frames and
they're very popular.
So that you will find that they have an extraordinarily effective rate of return on them.