Continuation Pattern

Continuation Pattern
See also

Continuation Pattern is named a consolidation pattern too. This is an Area Pattern that breaks out in the course of the preceding tendency ( R.D.Edwards, C.H.W.Bassetti, J.Magee 2012, p.545). A continuation pattern is when a share price continues in the equal path. This involves any course from the present opening position in which a trend can be followed. This type of pattern is nothing more than a sequel in the improvement of ups and downs on a shared graph, and regularly shows a continuation of the dominant aim in asset value. Continuation patterns are a stop in the price action of a stock, and they frequently happen mid trend ( J. Moore 2018, chap.8). In the graphs, there is additionally a reversal pattern. This kind of pattern easily determines that continuation is in a dynamic method ( M.Hooper 2008, p.239). Patterns of continuation lead to be quite short-term, occasionally just several days, and are frequently forgotten as a result ( B.Rockefeller 2014, p.154)

Forms of Continuation Pattern

The most common types of primary Continuation Patterns are (Wiley 2019, p.36-38) :

  • Triangles lead to be more generous structures that occur completely a trend. There are three kinds of them:
  1. A symmetric triangle is made by a price compression when the uncertainty of customers and merchants effects in reducing instability in such a way that rewards close to the center of the preceding trading range. The symmetric triangle is most likely to befall at the start of a trend when there is higher precariousness about the area.
  2. A descending triangle is formed by the current course form a short support level, and costs may rebound off that step while short-term tradesmen work for little profits.
  3. An ascending triangle can be defined as a horizontal in an upwards trend. This type is made by a continuation after the descending triangle.
  • Flags are smaller models than triangles. This type is created by an improvement in a bull movement or a rally in a market slump. A flag is a congestion space that tends away from the way of the trend and typically can be separated by two parallel lines between the top and bottom of the structure.
  • Pennants are irregular triangles usually tending to the trend, comparable to a descending triangle in a downward trend but without a top assistance line.
  • Wedges are patterns that look like large pennants, with top and bottom line angling in an identical way but does not spread to a spot. Wedges can be falling or rising.

The larger structures of these models are more significant than the smaller forms ( Wiley 2019, p.36).

References

Author: Paulina Zając