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Continuation Pattern

Continuation Pattern

A continuation pattern a trend in a security price series chart is expected to continue. There are several continuation patterns that technical analysts will identify as an indicator of an extended price trend.

Falling Wedge

As a continuation signal, a falling wedge forms during an uptrend and implies that upward price action will resume. As a reversal signal, this pattern forms at the bottom of a downtrend, indicating that an upward trend will come next. Unlike the rising wedge, the falling wedge is a bullish chart pattern.

Rising Wedge

A rising wedge in an uptrend is considered a reversal pattern that occurs when the price is making higher highs and higher lows. As the chart below shows, this is identified by a contracting range in prices. The price is confined within two lines which get closer together to create a pattern. This indicates a slowing of momentum and it usually precedes a reversal to the downside. This means that you can look for potential selling opportunities.



Rectangles continuation patterns

Rectangles are continuation patterns that occur when a price pauses during a strong trend and temporarily bounces between two parallel levels before the trend continues.

Bullish Rectangle

The price rises in a strong uptrend and then starts to consolidate between temporary support and resistance levels.It continues to move sideways, bouncing between these two parallel lines and forming a box-like shape that gives the pattern its name.The price then breaks out above the upper resistance level and continues its uptrend.

Bearish Rectangle

The price falls in a strong downtrend and then starts to consolidate between support and resistance levels.It continues to move sideways, bouncing between these two parallel lines and forming a box-like shape that gives the pattern its name.The price then breaks out through the lower support level and continues its downtrend.

Bullish Pennant

It is a continuation pattern that marks a pause in the movement of a price halfway through a strong uptrend, giving you an opportunity to go long and profit from the rest of the price rise.Bullish pennants occur just after a sharp rise in price and resemble a triangular flag as the price moves sideways, making gradually lower highs and higher lows. The uptrend then continues with another similar-sized rise in price.


Bearish Pennant

Bearish pennants are continuation patterns that mark a pause in the movement of a price halfway through a strong downtrend, offering you an opportunity to go short. They occur just after a sharp drop in price and resemble a triangular flag as the price moves sideways, making gradually lower highs and higher lows. The downtrend then continues with another similar-sized fall in price.

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