At the risk of stealing the formidable Woodshedder’s thunder (that may or may not be him getting a haircut above), I have seen quite a few high and tight bull flags pop up on the charts lately. Recently, I have been doing a video chart request series for 12631.ppt.ibankcoin.com/learnMore/” target=”_blank”>12631 subscribers, where members ask me to look at a few charts and I talk them through my analysis. Thanks to our talented community, such as @deberts and @thewife (there are plenty more excellent traders), below you will find two classic high and tight bull flags to consider.
Regarding what a high and tight flag is, after a sharp move higher, you are looking to see how a stock comes to terms with that move. If there are wild price swings and/or if there is a high volume selling affair, then the chart usually becomes too sloppy to swing trade. If, however, the stock quietly digests the big move on declining volume and tight price action, then the possibility of a secondary breakout higher increases substantially. The latter scenario gives us the high and tight bull flag look. Hence, you will always want to be on the lookout for these types of patterns, especially when the broad market is constructive and breakouts are more likely to be successful.
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