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Pennant on Chart of Gold Gives Hopes to Bulls

October 14, 2018 at 15:00 by Vladimir Vyun

A pennant has formed on the four-hour chart of gold. A pennant is formed as prices consolidate after a period of moving in one direction. It is a continuation pattern, suggesting that prices will move in the previous direction after taking a breather. Considering that on the present chart prices were moving upward, it is a bullish pennant. That means a move further up is likely.

On the present chart, yellow lines show the pennant itself. The cyan line is located 10% of the flagpole’s height above the pennant and suggests an entry point for bulls if prices will indeed break to the upside. The green line is at the flagpole’s length above the pattern and offers the target for taking profit.

It is important to be cautious in trading, remembering that patterns do not predict performance with 100% certainty as was demonstrated in the previous case of the similar pattern, when an upside breakout was not followed through with a rally to the profit objective.

You can click on the image to see a full-size version:

Gold - Bullish Pennant Pattern on 4-Hour Chart as of 2018-10-14

The chart was built using the ChannelPattern script. You can download a MetaTrader 4 chart template for this gold pattern. You can also trade it using the free Chart Pattern Helper EA.

Update 2018-10-15: The breakout trade has triggered at 6:07 GMT today with the entry price of 1223.38, stop-loss at 1219.16, and take-profit at 1255.49. The take-profit level will decline each 4 hours with the negative slope of the green line:

Gold - Bullish Pennant Pattern on 4-Hour Chart as of 2018-10-15 - Post-Entry Screenshot

Update 2018-10-18: The breakout turned to consolidation and hit the trade’s stop-loss at 6:43 GMT today:

Gold - Bullish Pennant Pattern on 4-Hour Chart as of 2018-10-18 - Post-Exit Screenshot

If you have any questions or comments regarding this bullish pennant pattern on the chart of gold, please feel free to submit them via the form below.

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