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Welcome to Bravechart. Your in-depth article on chart analysis from a Scotsman stationed in the Outback.

Bullish Flag Pattern on Ansell Limited (ANN)

As traders, we use technincal analysis as a reliable method for speculating on future price direction of both equities (shares) and indexes. Technical Anyalysis in simple terms is the study of historic price movements in a chart in search of patterns or consistantly traded support and resistance levels. Today we are looking at a specific chart pattern that falls under continuation patterns, the Bullish Flag Pattern.

Appearance:  A Bullish Flag pattern is comprised of:

  • A strong rise of bullish momentum with the volume and share price rising.
  • A break of the uptrend line and a sideways to bearish period where the share price starts to fall slightly, and the volume of trading decreases from the recent strong trend.
  • The breakout of the sideways to bearish movement and then a sharp rise higher once again. The volume should also accelerate after breaking out of the channel, or pennant.

Important Note: Be aware, this pattern could be the stock taking a breather or the direction is about to change to head Bearish. Wait to see the reverse to the upside and make sure the volume starts to increase.

Example: Ansell Limited

Ansell Limited showed this exact pattern just over a month ago. The stock is in a long-term uptrend and started to have a bearish fall-off near the end of June. The volume started to weaken as the channel continued, then increased with the break out of the resistance channel level. The following bullish move up continued higher, and we may be about to see another flag pattern forming currently.

 

There are many ways that you could take advantage of these patterns. As a specialist in derivatives, we are able to profit on a stock when it falls as well as when it rises.

If you would like to learn how to pick a stocks direction, then Join us at our live face to face one day “Technical Analysis, Picking the Direction of a Stock” course.

Contact us today on 03 8080 5788.

Regards,

Benjamin Farkas

TradersCircle