As of 11/20/2024
Indus: 43,408 +139.53 +0.3%
Trans: 17,002 -26.31 -0.2%
Utils: 1,055 +1.25 +0.1%
Nasdaq: 18,966 -21.33 -0.1%
S&P 500: 5,917 +0.13 +0.0%
|
YTD
+15.2%
+6.9%
+19.7%
+26.3%
+24.1%
|
 46,000 or 43,000 by 12/01/202418,000 or 16,600 by 12/01/20241,075 or 1,000 by 12/01/202420,000 or 18,400 by 12/01/20246,100 or 5,800 by 12/01/2024 |
As of 11/20/2024
Indus: 43,408 +139.53 +0.3%
Trans: 17,002 -26.31 -0.2%
Utils: 1,055 +1.25 +0.1%
Nasdaq: 18,966 -21.33 -0.1%
S&P 500: 5,917 +0.13 +0.0%
|
YTD
+15.2%
+6.9%
+19.7%
+26.3%
+24.1%
| |
|
46,000 or 43,000 by 12/01/202418,000 or 16,600 by 12/01/20241,075 or 1,000 by 12/01/202420,000 or 18,400 by 12/01/20246,100 or 5,800 by 12/01/2024 | ||
For more information on this pattern, read
Encyclopedia of Chart Patterns Second Edition
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The earnings flag is an event pattern that occurs after a company announces earnings. Price makes a large upward move, consolidates, and then resumes the uptrend. An earnings flag is the best performing event pattern. Discovered by Thomas Bulkowski in the late 1990s.
The above numbers are based on hundreds of perfect trades. See the glossary for definitions.
| Characteristic | Discussion |
| Trend | Performs best in an upward price trend. |
| Earnings announced | When the company announces earnings, the stock makes a large move up or price gaps upward the next day if the market happens to be closed. |
| Flagpole | Look for a near vertical price run, preferably lasting several days. |
| Flag | Near the top of the flagpole, price consolidates and usually trends downward. The appearance can be a flag, pennant, or an oddball shape. The best performers are tight congestion patterns, not loose price structures with the stock meandering up and down. |
| Breakout | A breakout occurs when price pierces a flag or pennant trendline or closes above the high in the pattern (including the flagpole). Don't trade unless you get an upward breakout. |
| Trading Tactic | Explanation | 
The Measure Rule
|
| Measure rule | The figure to the right shows the measure rule. Compute the height from the highest high in the pattern (A) to the announcement day low (B) and then multiply it by the above 'percentage meeting price target.' Add the result to the flag low (the lowest low to the right of the flagpole, C) for a price target. | |
| Confirmation | Buy when price pierces a flag or pennant trendline (D in the figure to the right) or rises above the event pattern's high (A), but not before. | |
| Yearly low | The best performers occur in a price uptrend but they are within a third of the yearly low. | |
| Sell signal | If price shows weakness in the first week, consider selling. Be prepared to take profits quickly. |
The above figure shows an example of an earnings flag event pattern. This one appears as a pennant (outlined in red), a small price pattern bounded by two converging trendlines. Earnings were announced and price jumped at the market open (point A) and then the pennant formed. When price pierced the pennant at B, that was the buy signal.
Trying to make money from this pattern would be difficult. Entry would be easy for a quick trader, but deciding when to exit would be the problem.
The second pennant in March makes things easier when price stages an upward breakout. Price throws back to the pennant base but keeps going down. A perfect trade in this example would earn about three points.
-- Thomas Bulkowski
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