Flag Pattern in Banknifty Daily Chart

Banknifty has formed a Flag Pattern in its daily chart. Support comes around 9700-9800 zone and Resistance comes around 10700-800 zone. So, After consolidation banknifty may continue in its upward direction.

THE FLAG PATTERN

The Flag pattern usually occurs after a significant up or down market move. After a strong move, prices usually need to rest. This resting period usually occurs in the shape of a rectangle, thus the word "flag". The Flag is considered a continuation pattern because after resting, prices will usually continue in the direction they did before.

Flag Buy Signal:

When price has moved higher and prices have consolidated, creating a channel of support and resistance, a buy signal is given when prices penetrate and close above the upward resistance line.

Flag Sell Signal:

Assuming prices previously moved downward, then after a period of price consolidation, a sell signal is given when price penetrates and closes below the support line.

Flags are among the most reliable of continuation patterns and only rarely produce a trend reversal.