Flags

Flags
It is a chart design used for technical analysis. Even if it is not much popular compared to the triangles, technical analysis equipment and wedges, the dealers consider the flags to be reliable consolidation style. A flag is formed when the costs increases sharply in a trading era which in turn forms a vertical design. It is called as flagpole. After the formation of flagpole, the powerful traders who are eager in capitalizing on prompt gain, start selling their asset holding. However, this do not result in a fast decline in cost, as the powerful traders start purchasing the holdings of stock with a hope to capitalize on the future increase in cost. If the costs fail to disrupt the upper line of a flag in twenty days, the pattern of the flag fails.