Forming a flag around the top of channel
Nikkei also a flag around the top of channel
CAC - France also close to top of channel
FTSE - also a flag but not a clear channel
Dow Jones - Clear channel and sideways flag ...
As we see all world indices have clearly come to the top of the channel and many of them are making flags around this zone.
Technically a flag breakout is a continuation pattern. Currently we are in an extreme short term uptrend so a breakout above the highs of the last few weeks may lead to a smart move.
As its a major channel breakout which is almost a 25-40% would be very difficult to get clearly out of it in the first move. So a breakout from here may also be illusionary but quick with lots of volatility and investors should be out of their holdings in this period then to try trade it ( nimble footed traders can definitely use it )
Possibly we could see a quick move with volatility which may be equivalent to the size of flag which is around 7-12 % in log basis. The consolidation in the flag has not lasted many sessions so a breakout move has to be very choppy and volatile.
Continue to watch the lower line of the flags or short term lows for a trend change! in coming days or to keep trailing stops closer to those momentum/flag lines.
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