Continuation Pattern

A continuation pattern is a technical analysis pattern that suggests that the current trend will continue. These patterns typically occur during a period of consolidation or a temporary slowdown in price movement. Continuation patterns can help investors and traders identify buying or selling opportunities at points where the trend is expected to continue.

Continuation patterns are interpreted as a signal that the previous trend will continue. They often form when prices are moving within a horizontal range or experiencing a consolidation period. During these periods, a formation emerges that indicates a balance between buyers and sellers.

Continuation patterns can be seen in both uptrends and downtrends. In uptrends, common continuation patterns include:

1. Flag Pattern: The flag pattern represents a pause in an uptrend. Prices form a flag shape while creating a resistance level. When this pattern completes, prices typically continue to rise.

2. Pennant Pattern: The pennant pattern represents a pause in an uptrend. Prices form a pennant shape while creating a resistance level. When this pattern completes, prices typically continue to rise.

3. Symmetrical Triangle Pattern: The symmetrical triangle pattern represents a pause in an uptrend. Prices move back and forth between a resistance level and a support level, forming a triangle shape. When this pattern completes, prices typically continue to rise.

In downtrends, common continuation patterns include:

1. Inverted Flag Pattern: The inverted flag pattern represents a pause in a downtrend. Prices form a flag shape while creating a support level. When this pattern completes, prices typically continue to fall.

2. Inverted Pennant Pattern: The inverted pennant pattern represents a pause in a downtrend. Prices form a pennant shape while creating a support level. When this pattern completes, prices typically continue to fall.

3. Symmetrical Triangle Pattern: The symmetrical triangle pattern represents a pause in a downtrend. Prices move back and forth between a support level and a resistance level, forming a triangle shape. When this pattern completes, prices typically continue to fall.

These continuation patterns can guide investors in finding buying or selling opportunities at points where the trend is expected to continue. However, it is important to always exercise caution and verify with other analysis tools.