WEBVTT 00:01.280 --> 00:06.420 Hi everyone and welcome back to this wealthy education technical analysis training course today we're 00:06.420 --> 00:13.230 going to be talking about continuation patterns and we'll be focusing on triangle's flags and pennants 00:13.620 --> 00:21.870 triangles flags and pennants or continuation patterns in either an uptrend or a down trend our graph 00:21.870 --> 00:32.190 to the left shows a flag continuation pattern and a bullish uptrend the pattern represents a price consolidation 00:32.700 --> 00:35.450 with minor support and resistance levels. 00:36.230 --> 00:40.680 We can use the support and resistance levels as by signals and the trend. 00:40.820 --> 00:46.640 If you'll remember we talked about exponential moving averages and how we could use those as support 00:46.640 --> 00:51.410 levels to give us buy signals and sell signals in a trend. 00:51.710 --> 00:55.300 We can use triangle's flags and pennants in the same way. 00:55.340 --> 01:01.460 So what what we're looking for is the stock to pull back in a bull trend. 01:01.790 --> 01:11.300 And when the stock breaks the upper portion of the resistance within the triangle flag or pennant that 01:11.300 --> 01:15.260 break can be taken as a buy signal for the stock. 01:15.260 --> 01:22.290 The same is true in a bear trend when the stock is trending down and then pulls up. 01:22.370 --> 01:28.830 The pattern to form a triangle flag or pennant when it breaks the lower bound of support. 01:28.940 --> 01:36.500 And that pattern then that is taken as a signal to enter the stock on the short side a flag which is 01:36.500 --> 01:44.150 represented here on the graph looks like a rectangle a pennant looks like a symmetrical triangle and 01:44.150 --> 01:47.130 a triangle looks like a triangle on the chart. 01:47.310 --> 01:52.800 What we can have both ascending and descending triangles. 01:52.830 --> 01:56.060 So let's take a look at triangles flags and pennants on the chart. 01:56.070 --> 02:04.800 Let's look at our first pattern which is a flag pattern in the chart of Intel Intel was trending up. 02:04.810 --> 02:17.900 We have the stock an uptrend and we see a pullback in the uptrend here. 02:17.990 --> 02:22.370 That's the upper bound of the flag. 02:22.490 --> 02:23.910 Here's our lower bound. 02:28.920 --> 02:37.980 Our flag after this three day pullback on the fourth day the stock breaks the upper bound or the resistance 02:37.980 --> 02:41.500 level of our flag and moves to the upside. 02:41.520 --> 02:47.820 This could have been our buy signal or we could have purchased the following day after it was clear 02:48.600 --> 02:59.930 that the stock had broken the short term flag pattern the stock continued to move up from here which 02:59.930 --> 03:02.170 is around the twenty five and a half level. 03:03.400 --> 03:09.010 Up to round the 29 25 level before turning down. 03:09.060 --> 03:16.740 So this was a continuation flag in a bull trend and Intel gave us a buying opportunity when the stock 03:16.740 --> 03:17.670 pulled back. 03:18.830 --> 03:23.030 Now let's use the chart of Qualcomm to look at a pennant pattern. 03:23.030 --> 03:29.460 We have Qualcomm and we're looking at an hourly chart and you often see flags and pennants and triangles 03:29.480 --> 03:35.020 on hourly charts that can help guide your trading on a shorter term basis. 03:35.030 --> 03:42.640 So if we look here in July on July 18th we see that the stock is moving 03:46.630 --> 03:57.710 has a slight pullback and then continues the bullish pattern and then for several hours we have a pullback 04:01.700 --> 04:02.310 here. 04:04.260 --> 04:12.740 And support here which is around 50 percent of our green candlestick is also an important number. 04:12.740 --> 04:14.210 And here we have a pennant. 04:14.240 --> 04:26.160 So when the stock breaks out at the end of the pennant pattern it moves up comes back and holds the 04:26.160 --> 04:27.190 support level. 04:28.570 --> 04:36.870 As it moves up a little more we then have the stock coming back and testing the support level which 04:36.870 --> 04:38.820 we can continue to draw here. 04:39.550 --> 04:46.520 And then moving up bouncing off support moving up bouncing off again before it finally moves up off 04:46.540 --> 04:52.000 the 58 level back up to the 62 level and beyond. 04:52.030 --> 05:00.600 So our it ended up being longer term support on an hourly chart which we kind of used to keep us and 05:00.610 --> 05:05.480 a long trade until the stock finally made a move higher. 05:05.520 --> 05:13.040 So that's the stock of Qualcomm with a pennant pattern again breaking out to the bullish side of this 05:13.040 --> 05:13.680 pattern. 05:14.710 --> 05:20.050 Coming back touching support several times and then filing moving higher. 05:20.050 --> 05:26.440 Thank you for watching this video on flags triangle's and Penates and our next video we will look at 05:26.440 --> 05:31.480 another continuation pattern the cup and handle formation. 05:31.480 --> 05:33.930 I look forward to seeing you in the next video. 05:34.150 --> 05:34.500 Thank you.