Triangle, Flag & Pennant Patterns

Triangle patterns form when the price range contracts between converging trend lines, creating a shape that resembles a triangle. There are three types: ascending triangles (flat upper resistance with rising lower support — bullish), descending triangles (flat lower support with declining upper resistance — bearish), and symmetrical triangles (converging upper resistance and lower support — neutral, breaking in the direction of the prevailing trend). Triangles in gold often form during consolidation phases before major directional moves.

Flag patterns are short-term continuation formations that appear as small rectangular channels sloping against the prevailing trend. In an uptrend, a bull flag slopes slightly downward before breaking higher. In a downtrend, a bear flag slopes slightly upward before breaking lower. Flags typically form after sharp directional moves (the 'flagpole') and represent brief pauses as the market digests recent gains or losses before continuing in the original direction.

Pennant patterns are similar to flags but form as small symmetrical triangles rather than parallel channels. They also appear after strong directional moves and typically resolve in the direction of the prior trend. The measured move target for both flags and pennants is calculated by projecting the length of the flagpole from the breakout point. For gold, flag and pennant patterns are particularly reliable during trending market conditions.