- CFA Exams
- CFA Level I Exam
- Study Session 19. Portfolio Management (2)
- Reading 56. Technical Analysis
- Subject 4. Chart Patterns
CFA Practice Question
A flag pattern is similar to a ______.
A. triangle pattern
B. head and shoulders pattern
C. pennant pattern
Explanation: These patterns are very similar and have the same uses. The only difference is that in a pennant the middle section is characterized by converging trendlines, much like those seen in a symmetrical triangle. The middle section on the flag pattern, on the other hand, shows a channel pattern, with no convergence between the trendlines. In both cases, the trend is expected to continue when the price moves above the upper trendline.
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