Continuation patterns indicate a trend will “continue”. The trend takes a pause for a price formation before resuming the previous trend. This usually consists of sideways price action before the resumption, appearing like a small consolidation before again moving in the prior trend’s direction. These trends are substantially shorter than reversal patterns.

It is important to note that it won’t always be obvious if a pattern is a continuation pattern or a reversal pattern while the pattern is in formation. The type of pattern will only become obvious once completion has occurred. Multiple patterns can be reversal patterns or continuation patterns.

Typically, the continuation pattern occurs halfway through the overall trend. You can often take the length of the trend before the continuation pattern and add that onto the trend after the finished pattern. This gives a preliminary target. It isn’t a perfect technique, and you should always be aware of resistance or support levels at the same or higher timeframe when considering this approach.

American Markets Analysis:

• Summaries of American Economic Structure
• Performance of Major
• Imports/Exports
• Federal Reserve Mandate versus Expectations
• Performance Indexes of U.S Economy
• Economically Correlated U.S Dollar Projections
• Large Trading Fund Index Sentiment Readings
• Market Wide Earnings Versus Valuations
• Fundamental Ranking of U.S Business Sectors
• Best and Worst Future Consensus Estimates
• Occasional: Firm Fundamental Strength Report
• List of Technicals to Look for While Trading