FLAT
Flat is a specific type of tendency: "flat" or "side" trend ("stub"). When the price fluctuates in more or less stable horizontal (or close to horizontal) channel, this situation is called flat.
"Narrow" and "expansible" flats deserve a particular attention. Progressive narrowing of price channel (consolidation) happens in the case, if price fluctuation decays slowly. As a rule in paradigm of the narrow flat a correction takes place subject to market participants have not agreed yet that general tendency exhausted (it means they do not ready for trend change), but has no strength for further development of prevailing tendency.
Picture 7. Narrowing and widening of flat channel
THE CONTINUATION PATTERNS
A. "Flag"
Flag as the model of continuation pattern is shown at the following illustration.
Flag is the movement of the price in certain range, that is shown by red dashed line on the illustration. The potential of the movement when the price leaves the channel has at least the same size as "flagpole".
Picture 11. "Flag" continuation pattern
B. "Pennon"
Picture 12. "Pennon" continuation pattern
"Pennon" pattern is one of the individual cases of the flag pattern. It is formed in those cases when the support gradually increases, and the resistance gradually lowers. From the point of view of price dynamics the consolidation takes place. The break in the level of resistance, as a rule, leads to the formation of new current trend and the potential of this movement is no smaller than the size of the "flagpole".
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