Continuation Pattern
Any pattern that forms mid-trend and resolves in the same direction as the prior move — flags, pennants, and triangles are the most common.
A Continuation Pattern is a pause or consolidation within an existing trend that — once resolved — is followed by a resumption of the prior trend direction. They represent periods of digestion rather than reversal.
Common bullish continuation patterns: Bull Flag, Ascending Triangle, Pennant, Rectangle, Falling Wedge. Common bearish: Bear Flag, Descending Triangle, Rising Wedge.
- The trend context before the pattern determines whether it is continuation or reversal — the same shape can be both depending on location.
- Volume contraction during the pattern and expansion on the breakout are the hallmarks.